Who Needs Professional Investors When You Have Housewives

Dammit! I should have become a housewife/husband instead of trying to get into the financial industry!
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Housewife beats traders at their game
By Johnson Choo, TODAY | Posted: 04 July 2007 1218 hrs

A housewife beat professionals at their game when she emerged the overall winner of a warrant trading contest organised by Macquarie Securities.

Trading over the past eight weeks in a simulated environment mirroring the SGX warrants market, Madam Chua Chwee Heok managed to become a "millionaire" by increasing the value of her hypothetical $100,000 investment to more than $1 million.

Mdm Chua, new to warrants trading, said: "My son, who also entered the competition, helped me. I found the contest challenging and educational and it's given me a taste for warrants trading."

She won the grand prize of $8,000 cash, which she plans to use to visit her family in China.

Macquarie said Mdm Chua "played a highly geared strategy", trading exclusively in warrants over the Hang Seng Index, riding on the back of a 4.5-per-cent increase in the value of the Hang Seng.

"The aim of the Macquarie Warrant Hotshot contest was to increase investors' understanding of warrants and to improve their trading skills," said Mr Barnaby Matthews, head of warrants at Macquarie Securities here.

"It was also a great opportunity for new investors to gain experience in warrants without risking any capital," he said.

Trading of structured warrants averaged $1.7 billion a month in the first quarter of this year, an increase of about 55 per cent from the same period a year ago. In 2004, transactions averaged $40 million a month.

There are primarily two types of warrants: Call and put warrants.

Call warrants give the holder the right, but not the obligation, to buy the underlying stock at a predetermined price, on or before a predetermined date. It will generally appreciate when the price of the underlying stock rises.

Put warrants, on the other hand, give the holder the right to sell the underlying stock at a predetermined price, on or before a predetermined date. It will generally appreciate when the price of the underlying stock falls. - TODAY/sh