Call warrants jump up to 120% on relief rebound; what can you do if unease persists?
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This morning, Japan's $Nikkei 225 Index(N225.JP)$ leads the Asian market rebound with a 4% gain to 54,620 as of 925AM after crude oil fell below the USD 90 level (after trading within whiskers of the USD 120 level yesterday morning) on the back of US President Trump's signal that the ongoing conflict with Iran would resolve “very soon”
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Trump said that he did not believe the conflict would be over this week, but insisted the operation was ahead of schedule
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Call warrants across various stocks and indices rose as much as 120% this morning on the broad market rebound
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Meanwhile, cross-asset volatility showed little sign of easing — with a market risk indicator hovering near levels seen when Trump unveiled global tariffs last year (Bloomberg)
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Higher energy prices continues to pose a dilemma for central banks across Asia’s net oil importers: tighten policy to contain inflation or tolerate further currency depreciation (Bloomberg Macro Squawk)
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The US Brent crude remains up more than 60% this year, meaning the inflationary impact from higher energy costs will persist even if the Middle East war de-escalates
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Those who worry about persisting volatility on the downside given the geopolitical tensions can consider hedging with put warrants which dominate today's top losers table given the broad rebound: https://warrants.com.sg/tools/warrantsearch/?underlying=all&maturity=all&expiry=all&type=put&effectiveGearing=all&indicator=all&moneyness=all&issuer=MBL
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Put warrants move in opposite directions as the underlying. Meaning if stocks/indices came off, put warrants would generally move higher
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For example, in the past two weeks where the market was heavily sold out since the start of the Middle East conflict, the top gaining put warrants made returns of 111% to 342% from 23 February to 9 March
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The Exposure Simulator tool helps calculate the warrant investment amount for those seeking the shelter of put warrants to hedge the short-term downside of their portfolio exposure. Find out how to use it here: https://warrants.com.sg/education/marketcommentary/Warrant%20tool%20tutorial%20video/uT6oleWgr00/0
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