Exercise Price : RM 9.25
Conversion Ratio : 2.5
Premium : 0%
Maturity Date : 30/08/2018 (240 Days)
Current Price : RM 0.22
Issuer : CIMB BANK
WHY IS MAYBANK C34 TOO GOOD TO BE TRUE??
Look at the Conversion Ratio of 2.5 :1 !!!
It is a crazy conversion ratio too good to be true !
This means that for every 2.5 bids Maybank moves, this call warrant would move up by 1 sen. In terms of % gain, it would be huge leverage opportunity for this call warrant.
To be honest, there is NO other call warrant in Bursa Malaysia with this amazing conversion ratio for a stock priced at the RM 9- RM 10 range.
Most warrants have a conversion ratio higher than 4:1, or even 8:1 if the mother share is priced at the RM 9-10 range.
ON TOP OF THAT,
This warrant is trading at 0% Premium and has 240 days to maturity !!!!
Once again there is no warrant like this trading at 0% premium with so many days to maturity in Bursa Malaysia !! This is definitely a gem to watch !!!
ASSUME 2.5% PREMIUM ON MONDAY
Assuming the market realizes how undervalued this warrant is, the market maker may imply a 2.5% premium and that would mean this warrant would be trading at RM 0.30 !!! That is already a 36% gain from Friday's closing just by ARBITRAGE alone !!! There is a chance that this warrant will gap up significantly on Monday.
WHAT HAPPENS IF MAYBANK TRADES AT RM 10.50 !!???
RM 10.50 is just 70 sens away from Friday's closing. However, This warrant would be worth RM 0.50 (+127%) if MAYBANK hits RM 10.50 in 240 days. This is highly possible as the market is so bullish right now !!!
With such amazing upside potential, this call warrant is too good to be true !!!!
Thank you for reading,
Caution Note !! Trading warrants is high risk and should only be done by professional and experienced traders who are aware of the risks involved in trading warrants !!! Please avoid trading warrants if you are unaware of how it works. Greatwarrants does not want you to simply buy things which you are unfamiliar with, as you must have sufficient knowledge of warrants before trading it. If you are unfamiliar, consider buying the underlying asset for a safer play at your own risk. Tq.
Trading Warrants is a great tool for leverage. However, high returns come with high risk. Therefore, investment decisions should be borne at your own cost and I will not be held liable for any investment decisions made. DO NOT BUY WARRANTS IF YOU DO DO NOT KNOW THE RISK. The market does not need you to push up the warrants price. Let the market issuer play its role and the forces of supply and demand take place for the case of Warrants.