Trading activity in Nikkei 225 Structured Warrants Continues to Grow
OREANDA-NEWS. In the 2016 year thus far the Nikkei 225 index has generated a 1.5% total return in SGD terms, with 180 day historical volatility of 29.5%. By comparison the Straits Times index (STI) has generated a 2.6% total return with 180 day historical volatility of 15.8%.
Total traded value for Nikkei Structured Warrants in the September month to date is S$17.8 million – an almost threefold increase from the month of August 2016. This month represents the highest level of trading activity in Nikkei 225 Structured Warrants seen since April 2008.
The most active Nikkei 225 Structured Warrants in the year to date have been a 17,500 Call Warrant and a 15,500 Put Warrant – both with a 9 December 2016 expiry. The Nikkei 225 Index closed today close to the mid price of the two strikes at 16,465.
Compared to Singapore’s overall Structured Warrant market breakdown of trade value to 75% Call Warrants and 25% activity in Put Warrants, only 52% of Nikkei 225 Structured Warrants trading has been in Call Warrants, with the remaining 48% in Put Warrants.
Structured warrants are an example of Specified Investment Products (SIPs). The MAS has introduced measures for intermediaries to safeguard the interests of individual investors investing in SIPs, which are products with features that might be more complex in nature.