@Multibagger @Klein-Anleger1 Can you explain factor warrants in a little more detail? What are the differences to KO certificates?
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@Tigawutz Sure, I can. A KO certificate has a fixed price at which it goes KO. A factor certificate always reflects the daily performance to the extent of the factor in both directions. If the share rises by 5% with a factor of 5, the certificate is worth 25%. If the share falls by 20% on the day, the certificate is KO and the value is 0, even if you were previously 100% up.
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@Tigawutz In this case it is a 3 factor certificate and that means that IREN should not fall more than 33% per day. But I do not expect that to happen...
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•many thanks
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•thank you again for the explanations. i have read a bit more about it 😍 there are exciting possibilities without the lever changing and or the ko being tightened as with a ko certificate
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@Multibagger But why is that better? Isn't it smarter to take a KO right away if you expect a rise? or less initial risk?
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•@Simon_n Did I write that this is better? I never use factor certificates. But I have been asked to explain and then I am happy to do so. I would always prefer a KO certificate. There is only one reason to take a factor certificate. You speculate on a short-term trend reversal at supports and resistances and don't want to go KO if the support doesn't hold.
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•@Multibagger Wasn't an accusation! 😄 I just meant out of interest whether this has an advantage over KOs, because I've only used KOs so far
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@Multibagger Wasn't an accusation! 😄 I just meant out of interest whether this has an advantage over KOs, because I've only used KOs so far
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•@Simon_n I'll briefly explain why I opted for a factor warrant this time: firstly, I don't have the knock-out risk mentioned by Chris. risk mentioned by Chris. In addition, I can profit disproportionately from sustained upward phases, i.e. several consecutive days with a green sign, because the leverage always remains constant. If I had bought a triple leverage with a knock-out yesterday, the leverage would only be 2.7 or so today and after a week I would have to change it at the latest if I still want to have a leverage effect. And because I only want to take advantage of a short upward movement here, which will probably go up to around $50 or $52, I feel most comfortable with a factor warrant. @Multibagger Is that right, or have I missed something?
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•@Klein-Anleger1 oh, and the spread for the warrant with knockout was also much higher than for the factor warrant
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