Stock Exchange Of Thailand, Set Could Get Hammered

[David48]

The Headlines 1 of 3

Reconciliation Attempt Hammers SET Index

What’s happening? We will attempt to clarify the current Thai political mess that is in the early stages.

Our overall view is that as long as the reconciliation bills are not proposed to parliament for immediate consideration, the potential implications to both the country’s economic fundamentals and the capital market should be minimal.

Source:- http://210.1.59.10/research/Daily201261185951281400.pdf

Note to Mods ... this is not political discussion but closer to a hypothetical scenario produced within Thailand and how each outcome might potentially affect the SET.

EDIT:- Their opening lines contained within the article which is a defacto disclaimer ...

"It should be noted before we discuss the current political chaos that our only intention is to analyze the political environment for equity investment purposes and that we do not support any political faction or party (either the government or the opposition parties)."

Edited June 2, 2012 by David48

[David48]

The Headlines 2 of 3

Scenarios and implications:

However, if the government decides to move the bills up the agenda for deliberation in parliament, this could possibly trigger more severe street protests.

This scenario could possibly have a moderate impact to the economy, with potential market downside to 1,050pts (SET index could give back this year’s premium and retreat 7.5% to match YTD return of MSCI ex Jp.).

Source:- http://210.1.59.10/research/Daily201261185951281400.pdf

[David48]

The Headlines 3 of 3

Worst-case scenario:

The worst-case scenario involves prolonged protests, street clashes between rival groups, and an interruption of economic and business activities.

In this case, the private sector would start to hold back on business expansion, which would erode both foreign investors’ confidence and local investors’ appetite to invest in the stock market.

This scenario implies the SET index at 940pts (SET index could be traded at PER of 10x).

Source:- http://210.1.59.10/research/Daily201261185951281400.pdf

Want to know more about

Fish Farms or a simple Australian Visa Application ?

[BrianCR]

Good way to build up your postings what was wrong with ONE post?

[bangkokrick]

Clarity?

[CARLIN]

Who T F Knows?

no one

.

Edited June 3, 2012 by CARLIN

[David48]

Good way to build up your postings what was wrong with ONE post?

Clarity?

Thank you bangkokrick for that point.

BrianCR ... I don't why you would want to write that.

Obviously you have not read any of previous Opening Posts or you wouldn’t imply that.

Mywelf with well over 1,500 posts (and bangkokrick with over 2,500) I have neither the care not desire to increase any count.

The reason for the three different posts was exactly what bangkokrick said ... clarity.

There were three scenarios, each worth discussing in it's own right.

Three different Opening Posts however, would have been a stretch.

Mostly people who try and increase their post count simply write one word or one sentence replies like ... you.

If you want to read some of what I write ... know more about

Fish Farms or a simple Australian Visa Application ?

Edited June 3, 2012 by David48

[David48]

Apologies for the slightly negative comments above ... some people.

I don't expect to promote much discussion with the Topic of the tread as it's mainly scenario based and some dissection of that already carried out here.

However I do encourage us to discuss my Opening Post because the analysis is done by Thai people writing within the Thai perspective.

[bangkokrick]

I tend to agree with the first post, but I also think that the longer it goes on the worse it could be for Thailand.Investors do not like long term instability.

[soi41]

I tend to agree with the first post, but I also think that the longer it goes on the worse it could be for Thailand.Investors do not like long term instability.

If the SET goes low enough, foreign investors will return. Doesn't matter if the peasants are killing eachother in the streets or who is in charge: the reds, the yellows or some coupgeneral. Money doesn't care about political correctness, if there is a buck to be made, investors will be there. Interesting that PEx10 today is considered low (cheap stock), whereas 10 years ago it would have been seen as high, depending on sector ofcourse. More air inflated into the balloon .

Just a couple of days ago JPM recomended to buy SET, with a potential upside within a year of 19%! So who are we going to listen to ? As for the comments in the OP about seing it within the Thai perspective, my experience after many years of trading here, is that most Thai analysists are not were good at what they are doing. As usual in the end, after getting as much information as possible, it is up the you to make up your own mind

[David48]

I must admit, I am still waiting for a lower SET before I seriously start buying again.

OH ... and to put that in perspective ... fully invested we are only talking Baht 1 1/2 Mil ... small change for some who play the market regularly, but enough for me to keep me interested.

At the moment I have about 1/2 that figure held as cash.

Edited June 4, 2012 by David48

[David48]

While I have your attention ... is there an 'options expert' who regularly posts here.

Once the market picks up a bit, I wouldn't mind selling some covered calls on the shares I own.

Thanks in Advance.

[w11guy]

You're asking for financial advice in this forum? What are you trying to do, get yourself wiped out?

[lannarebirth]

must admit, I am still waiting for a lower SET before I seriously start buying again.

OH ... and to put that in perspective ... fully invested we are only talking Baht 1 1/2 Mil ... small change for some who play the market regularly, but enough for me to keep me interested.

At the moment I have about 1/2 that figure held as cash.

While I have your attention ... is there an 'options expert' who regularly posts here.

Once the market picks up a bit, I wouldn't mind selling some covered calls on the shares I own.

Thanks in Advance.

If you are looking to buy lower and seeking an options strategy, why don't you consider selling puts on those stocks you wish to accumulate? You take in premium while you wait for your price.

http://sellacalloption.com/2011/09/14/the-naked-put-selling-puts-to-accumulate-stock/

[yoshiwara]

must admit, I am still waiting for a lower SET before I seriously start buying again.

OH ... and to put that in perspective ... fully invested we are only talking Baht 1 1/2 Mil ... small change for some who play the market regularly, but enough for me to keep me interested.

At the moment I have about 1/2 that figure held as cash.

While I have your attention ... is there an 'options expert' who regularly posts here.

Once the market picks up a bit, I wouldn't mind selling some covered calls on the shares I own.

Thanks in Advance.

If you are looking to buy lower and seeking an options strategy, why don't you consider selling puts on those stocks you wish to accumulate? You take in premium while you wait for your price.

http://sellacallopti...cumulate-stock/

If you think the market is going lower wouldn't you be buying puts?

[lannarebirth]

must admit, I am still waiting for a lower SET before I seriously start buying again.

OH ... and to put that in perspective ... fully invested we are only talking Baht 1 1/2 Mil ... small change for some who play the market regularly, but enough for me to keep me interested.

At the moment I have about 1/2 that figure held as cash.

While I have your attention ... is there an 'options expert' who regularly posts here.

Once the market picks up a bit, I wouldn't mind selling some covered calls on the shares I own.

Thanks in Advance.

If you are looking to buy lower and seeking an options strategy, why don't you consider selling puts on those stocks you wish to accumulate? You take in premium while you wait for your price.

http://sellacallopti...cumulate-stock/

If you think the market is going lower wouldn't you be buying puts?

One sells out of the money puts naked to take in premium (income) with the understanding that if the lower strike price is hit you will then buy the stock. The poster said he wanted to accumulate stock but at a lower price point so that's why I suggested it. Buying puts is a speculative bet that prices will fall. I didn't get the sense he wanted to be short the market but to buy lower.

[yoshiwara]

One sells out of the money puts naked to take in premium (income) with the understanding that if the lower strike price is hit you will then buy the stock. The poster said he wanted to accumulate stock but at a lower price point so that's why I suggested it. Buying puts is a speculative bet that prices will fall. I didn't get the sense he wanted to be short the market but to buy lower.

Well if I want to buy that stock at the lower price, it is because I also think it can drop to that lower price, so if you are selling the puts then I will take the other side of that trade thank you very much.

[lannarebirth]

One sells out of the money puts naked to take in premium (income) with the understanding that if the lower strike price is hit you will then buy the stock. The poster said he wanted to accumulate stock but at a lower price point so that's why I suggested it. Buying puts is a speculative bet that prices will fall. I didn't get the sense he wanted to be short the market but to buy lower.

Well if I want to buy that stock at the lower price, it is because I also think it can drop to that lower price, so if you are selling the puts then I will take the other side of that trade thank you very much.

As you like, but I get payed for my trade regardless of what happens. You get payed if the stock falls sufficiently and if time decay hasn't eaten up your possible gains. What could be more profitable than selling something you don't own?

[MrRealDeal]

Well it has to drop to not just the price but to the price below the preimum AND has to go up again ...... If your going to sell just put's you should really be prepared to cover the put not just buy the stock at the strike price. ..... But the OP post sounds like the average guy on the news ,,,,,, Stock A is at 100 .... how do you like it mr expert ? Well if it goes to 112 I think you should buy more , it it drops to 80 I think you should sell it ..... where do you think it will go from here mr expert ? ......if it goes to 106 I think it will go up , if it goes to 89 I think it will go down ...... thank you mr expert you can pick up your check on your way out of the building.

[MrRealDeal]

You do NOT get paid reguardless of what happens............. you might lose less, but if it drops more than your preimum you don't "get paid" and if you were to cover it's no guarentee as you might get whipsawed ...... their is no such thing as getting paid reguardless of what happens.

[MrRealDeal]

Another point selling a put limits you to only profiting up to the price of the preimum... not very much at all ..... buying options gives you MUCH more potential for profit ..... so the answer to your question is it's actually BUYING things you don't own thats more profitable than selling things you don't own.

[David48]

To all the replies here ... thanks very much ...

I have option traded for more then 8 years in my home country so fully understand the principles involved. lannarebirth ... great link explaining most things.

What I am interested really in is anyone here doing this in Thailand on/with Thai stocks?

Once the market picks up a bit, I wouldn't mind selling some covered calls on the shares I own.

So the Puts only have interest when a desired stock has reached a desperate level and I am happy to buy the Stock at that price and selling a put to fund the purchase of a call in expectation that the stock will rise again.

If I get exercised at the sold put price ... I'd be happy to own it, even it fell lower because I saw value in at that price.

But I'm really interested in covered calls a bit of cash flow.

Thanks again ...

OH … feel free to grab this tread and thrash out the option debate … I could learn something …

Edited June 6, 2012 by David48

[MrRealDeal]

Well the first thing I would point out is options are illegal in Thailand ! LOL ..... So it might render the discussion about buying them or selling them on the SET Moot ! LOL

The government or perhaps the King himself sees options as gambling is the reason options are not available on the SET .....

Edited June 6, 2012 by MrRealDeal

[lannarebirth]

You do NOT get paid reguardless of what happens............. you might lose less, but if it drops more than your preimum you don't "get paid" and if you were to cover it's no guarentee as you might get whipsawed ...... their is no such thing as getting paid reguardless of what happens.

Stock trading at $45 but OP wants to buy it at $43. Sells a $43 OTM strike put and takes in premium. Stock goes to 50 so he does not buy stock but still collects premium.

Stock trading at $45 but OP wants to buy it $43. Sells a $43 OTM strike put and takes in premium. Stock goes nowhere3 or marginally up or down but does not hit strike. He does not buy stock but still collects premium.

Stock trading at $45 but OP wants to buy it at $43. Stock sinks to $43 or lower and OP buys stock he wanted and collects premium. IF OP so chooses he can set stop loss at purchase price minus premium for riskless trade.

[lannarebirth]

Another point selling a put limits you to only profiting up to the price of the preimum... not very much at all ..... buying options gives you MUCH more potential for profit ..... so the answer to your question is it's actually BUYING things you don't own thats more profitable than selling things you don't own.

You don't seem to understand the OP wants to OWN the stock. It's just a simple strategy to own it at a lower price. It is not a speculation on the market as are the buying of puts and calls.

[MrRealDeal]

I understand perfectly ...... Your rose colored glasses ignore your 45 dollar stock going from 45 to 25 overnight rendering your stop loss order irelevant losing a boatload of cash ....just like GMCR a few weeks back

Your rose colored glasses\inexperience also ignores that once he covers it can go up losing money ..... it's not RISKLESS it's that you are inexperienced and frankly don't know what you are talking about.

I didn't say you couldn't give a lot of scenerios that it WOULD work ...... I said it doesnt ALWAYS work and is NEVER riskless and if you actually knew what you were talking about you would know that already.

[lannarebirth]

Well the first thing I would point out is options are illegal in Thailand ! LOL ..... So it might render the discussion about buying them or selling them on the SET Moot ! LOL

The government or perhaps the King himself sees options as gambling is the reason options are not available on the SET .....

Well then, that makes it a moot point doesn't it.

[lannarebirth]

I understand perfectly ...... Your rose colored glasses ignore your 45 dollar stock going from 45 to 25 overnight rendering your stop loss order irelevant losing a boatload of cash ....just like GMCR a few weeks back

Your rose colored glasses\inexperience also ignores that once he covers it can go up losing money ..... it's not RISKLESS it's that you are inexperienced and frankly don't know what you are talking about.

I didn't say you couldn't give a lot of scenerios that it WOULD work ...... I said it doesnt ALWAYS work and is NEVER riskless and if you actually knew what you were talking about you would know that already.

I didn't say one couldn't lose money but not more than he would lose if he bought the stock anyway which is his intention. He's looking for a position in the stock. Where it goes after he buys it is irrelevant to the discussion.

[Naam]

Captain Picard! long range sensors discovered

rose colored glasses\inexperience. your orders?

[MrRealDeal]

Sorry but yes you did .... you said you are" sure to get paid" and you said "Riskless" which means you can't lose money, and then went on to try and explain yourself , just listen and learn dude don't argue or backtrack just admit I might actually know what I am talking about. ....... However you are correct if he put in a limit order for price X and it filled, he would lose less with a put order at price X ...... the reason for that is he is getting paid for the risk you don't understand , that risk is a severe downturn in the stock that would change his mind about wanting to own it. Or a severe downturn in the markets .....

Don't kid yourself that some 100 dollar stock that looks good today at 80 looks just as good for 80 at 60 .... the risk you get paid for taking is you are esentially locked in for the overnight crash. The reason to NOT sell puts would be the market is unstable .....like it is now ..... and some calamity like the euro problems would make you wish you haden't agreed to buy the stock at prices reflecting the before the calamity market ..... Because where it goes after you buy it IS NOT IRELEVANT ! lol .....

So to answer the overall question selling puts in a market where growth seems questionable , Europe seems questionable , Jobs seem questionable , China seems to be slowing , as a strategy to pick up a stock at a discount is not very sensible on a risk reward basis as the possible downturn is far more severe than the preimum you will get for taking that risk.