We have already successfully closed two Bayer embedded warrants in the past few months, we would now re-enter such a position. Because even if Bayer shares often show strong fluctuations in the short term: in the medium term, they move sideways here for months. And this is an ideal basis for “domestic trade”.
Bayer so far it’s doing well in terms of sales and profits. Analysts’ price targets are correspondingly optimistic, with the stock expected at 72 euros on average in the medium term. But investors aren’t following suit…and not just lately. The reason:
When you need to flip a coin to go long or short, “inliners” come into play
Monsanto subsidiary glyphosate weedkiller lawsuits won’t end, backlog is huge, costs are there Bayer still to come, not predictable. This is a sword of Damocles standing in the way of a solid uptrend that will build on the group’s solid overall position. In addition, the number of so-called “activist investors” is growing. Bayerwho are trying to make the company more dynamic and efficient in their opinion, but have met with a lot of resistance so far.
source: market maker pp4
The bottom line is that the stock is being held to the bottom by strong business development, but at the same time is being slowed by the sword of Damocles of glyphosate. The result is a month-long ups and downs that, since the framework conditions are unlikely to change fundamentally for the time being, can last long enough for you to start a new insider trade after the insider that expired last week. Before you find below the details of the warrant we are offering today, as always with this derivative, first an explanation of exactly what an embedded warrant is:
Side trends are just what you need for inliners.
With an embedded warrant, the warrant holder makes a profit if the underlying stock remains within a predetermined price range until expiration. “Inliner” has an upper and lower price barrier that must not be touched until the end of the term. If this is successful, the owner of the embedded warrant will receive a payment of €10. The profit thus generated depends on the purchase price (whereas you don’t need to stay invested till the end of the term, it can be sold at any time). If this fails because the stock touches one of the two barriers, the warrant expires immediately and is worthless. Which means ______________:
Barriers need to be chosen so far from the current share price that there is a good chance that they will not be touched until the end of the term. In addition, the time frame should not be very long, because what seems certain today can be completely different tomorrow in the stock market. And one should never use an embedded warrant without first placing a stop below the upper barrier and a stop above the lower barrier of the stock in order to sell in time before the barrier is hit and a total loss occurs as a result.
The reason you can’t set these stop prices in the embedded warrant itself is that its price increases more and more as it approaches expiration. Because this mostly determines the chance of “surviving” the end of the term and then being able to collect the invoice price of EUR 10.00 of the note as a profit. As an investor, you are required to pay regular attention to the development of the stock. In addition, an embedded warrant is an interesting and rather unnerving alternative to a volatile market… if you don’t dare too much.
Option to trade Bayer roller skates with barriers at 42 and 64 euros
We would for that Bayer shares Go for an embedded warrant that has just under three months until expiration on April 19, 2023, and whose barriers of EUR 42 and EUR 64 offer solid opportunities for price swings in either direction.
This embedded warrant is offered by the issuer UniCredit, has a WKN HC2QRW and there is a buy/sell rate of €7.91 to €8.03 this Wednesday afternoon, so when the deadline is reached and the payment of €10.00 is reached, a profit of almost 25 percent will be made. ‘ in the table below.
To avoid a complete loss in case of an impulse at one of the barriers, it is always advisable to place a stop loss just before these barriers. In the case of “insiders”, the barrier approach cannot be equated to a specific price in the warrant, so for guidance we provide the relevant share price, see the data table below.
Important signs in the chart:
Resistors: €57.87, €59.41, €67.99
Supports: €48.67, €46.70, €43.90
Embedded Bayer stock warrant
| Basic | Bayer |
|---|---|
| WKN | HC2QRW |
| E V | DE000HC2QRW8 |
| Type | Built-in command |
| issuer | UniCredit |
| Duration | 19.04.2023 |
| Payout amount at the end of the term | 10.00 euros |
| Upper KO barrier | 64.00 euros |
| Lower barrier KO | 42.00 euros |
| Stop price in Bayer shares for the upper barrier | 63.00 euros |
| Stop price in Bayer stock for the lower barrier | 43.00 euros |
Trading-Chance’s previous trades for you in a watchlist:
You can access all previous trading opportunities with one click and see how the certificates and warrants presented there are performing. Just click the button below, this is the link to our trading opportunity watch list. If you would like to read the articles related to the products, please simply click on the “speech bubble” icon directly to the right of the product name.
But note that profit withdrawals, trailing stop-losses, embedded warrants that have expired on profit and trailing stops are not specifically noted here, here you will find the performance of derivatives without this “fine-tuning” from the day of the presentation.
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