Two new put warrants on the benchmark Dow Jones Industrial Average are being offered to Hong Kong investors, as brokers turn farther afield to drum up derivatives business.
Societe Generale's issue of 500 million put warrants on the Dow enjoyed healthy turnover on its first day of trading on Thursday. The company had originally planned 250 million warrants but doubled the issue on strong demand.
'As the [US] market is at a record high, a lot of people are betting it is overdone,' Paul Ng, of SocGen Equities and Derivatives, said.
This week, the Dow broke through the 9,000-point level but slipped back slightly, closing on Thursday at 8,994.86.
A put warrant gives its holders an opportunity to sell at a given price and thus essentially makes a bearish call on its underlying asset.
The SocGen warrant gives the buyer the right to sell the blue-chip index at 10,115.49 points. Its gearing is 5.6 times and its premium is 2.95 per cent.
This American-style put warrant - holders can sell the index any time before expiry - expires in March next year.
