I did a month ago but now I have no more ammo left for such “fun” money play… I think it is a unique time right now in history where one can buy a big bank stock for only 1 CHF per share, crazy times. Note that I would not put big money into this but “fun” money as I see it more like gambling and not an investment.
2 Likes
you could easily make +50% or more as well as -50% or more within weeks/months. as others mentioned, it’s mostly a huge gamble. just bear in mind that the trend is down for many years now and governments are worried about the banking system as a whole, not individual banks and their shareholders. as long as you’re fine with the risk/reward, it’s fine to make a bet.
2 Likes
Thanks for the precision, I totally agree with you and I know there have also been stock splits. It’s really more about the symbolic fact or psychological effect that someone can say they bought a big bank stock for 1 CHF a piece. I see it like a good story to tell when you are old 
2 Likes
more like: ‘it’s ok, grandson, everyone makes mistakes! i once bought into a swiss bank when it was a pennystock!’
joke aside, yeah, it’s a psychological thing. share price is basically irrelevant, it’s about market cap / enterprise value and the underlying fundamentals.
An idea for ParadeplatzBetz. There must be lots of anxiety about CS bonds (not AT) but I think it’s going to be repaid in full, as CS hadn’t technically defaulted. So, if their valuation is 10% of the nominal value or less, it might be worth to take a risk and buy them. 10x potential upside anyone?
P.S. I still offer to extract respective posts in this thread for a financial gambling thread, but I am not doing it without author’s explicit consent. Especially those who were actually gambling. PM me.
1 Like
that’s certainly what i’m doing, as described here i’m currently heavily underweight equities and hope to scale in at better prices soon.
What happens if one would sell some call options on CS within a far expiration date?
I aim to understand the status of the option in the case that the CS shares become UBS shares.
Thx
2 Likes
I am rusty with options but I was thinking about something similar. But:
Call options are financial contracts that give the option buyer the right but not the obligation to buy a stock, bond, commodity, or other asset or instrument at a specified price within a specific time period. The stock, bond, or commodity is called the underlying asset. A call buyer profits when the underlying asset increases in price.
So you need to have the stock I think.
Different if you want to buy. If you buy it, you might get UBS stocks at some point?
Also I was thinking that the price will go lower, so it’s better a put.
Selling puts, since the price should sooner or later go back to 0.75.
Not necessarily. If you are assigned as a call seller and you have no stock that you are obliged to sell, two things might happen (depends on the broker I guess):
- You will be short on the stock, means borrowing it from someone, at current market conditions
- The stock is bought automatically before being debited from your account.
Yes that sounds plausible.
PS. See also the update in the top post.
I didn’t understand it fully. I think that on my example the position will be worthless for swiss options? Which probably means no one will buy my put ?
If you think the stock will go lower, just simply buy puts, that way you can profit by closing them if you were correct without risking assignment.
First, listed options are traded on organized exchanges, same as other financial instruments. You are not trading against other users of IB, you are not trading against IB (this is how CFD work), you are trading against all exchange participants, including institutionals, market makers and so on.
Second, you can still trade Swiss warrants at IB, there is just no physical delivery. It means for example to profit from call, you have to close your position before it expires.
P.S. I also think that buying options is a better tool to profit from strong short term price movements and your risk is controlled.
It’s the “phisical delivery” that I don’t understand. No one is expecting a phisical delivery I think. I’d expect a delivery of the underlying on my account, that’s it. So I understood they meant that if I’ve bought a call and I want the underlying, I have to ask for it before the option ends.
1 Like
Yes, this is called “physical delivery”
Really?
on SQ it seems to be something else. As in paper form.
Edit: I googled it. It seems that they use the same terms for two different actions. For options, “phisical delivery” it’s just an electronic transfer of the underlying. Confusing.
You haven’t yet come across funds that invest in physical cryptocurrencies, right?
General word of advice, if you’re doing options on single stocks or indices it’s much better to do EUREX (for European stonks) / ICE/CME (for American stonks) options than warrants.
Source: “just trust me bro”
1 Like
“physical delivery” means the delivery of the underlying, whether stock/funds/commodities.
As opposed to “cash settled”
Hi, I try to be more precise: I have some CS share in USD (I trade on NYSE). I aim to sell some call options over them but I’m worry about the moment that the CS share will convert to UBS share. In such a case the buyer of the call how can exercise the contract while CS share will disappear?
1 Like
Ok but the CS share seams to be disappear in some months. How to buy automatically somethings that exists anymore?