21/11/24 08:57:00

Certificates: Bulls and bears on the move

Since the Trump election at the latest, certificate trading has been buzzing. In addition to the DAX, S&P 500 and Nasdaq, bets are often placed on Nvidia, Tesla and Rheinmetall. And recently also MicroStrategy.
 

21 November 2024. FRANKFURT (Börse Frankfurt). Due to the strong market movements following the US election, certificates are enjoying brisk demand. Before the election, investors tended to wait and see, but now there is a lot going on, as Patrick Kesselhut from Société Générale reports. ‘More volatility, more volume,’ explains Markus Königer from ICF Bank. Cryptocurrencies in particular are attracting a lot of attention.
Bitcoin continues to rise and today costs over USD 97,000, compared to less than USD 70,000 before the election.

 The US stock markets reached new all-time highs in the days following the election of Donald Trump as the new US president. Since last week, however, they have been falling again. At currently 18,967 points, the DAX is a long way off its all-time high of 19,675 points reached in mid-October.
According to Simon Görich from Baader Bank, DAX certificates in particular are being traded, as well as many products on US indices, oil, defence and tech stocks. ‘The direction is not always clear,’ he notes. The most popular underlyings at ICF are DAX, Nasdaq, gold, Tesla, Dow Jones, Nvidia, oil, Apple, S&P 500 and Rheinmetall. At Société Générale, the situation is similar with DAX, Nasdaq, gold, Nvidia, Dow Jones, Tesla, silver, Brent, S&P 500 and Rheinmetall. This is followed by many US tech stocks such as AMD, Microsoft and MicroStrategy.

MicroStrategy is new to the group. The share price of the US software provider has more than tripled since the beginning of September. The background to this is the company's Bitcoin holdings, which are becoming increasingly valuable due to the cryptocurrency's record run.

Magnificent Seven’ with competition from China

Once again, discount certificates are the focus of business with investment products on indices, especially on the DAX (DE000SW77XN4, DE000SY7SKZ2), as Kesselhut notes. These are mostly products with a cap of between 15,000 and 16,000 points and a term until the end of 2025. Also popular: leveraged products such as open-end knock-out puts on the DAX (DE000SJ1HZU6) and Nasdaq (DE000SU5VXS2) as well as KO puts on the Dow Jones (DE000SY2S1D6). According to Kesselhut, there are a conspicuous number of bears. The ICF also focuses a lot on open-end knock-outs on the DAX (DE000DQ1K3Y5), Nasdaq (DE000HS8JKH8) and Dow Jones (DE000PG9LAN5), sometimes bearish, sometimes bullish.

According to Kesselhut, a China certificate, the index tracker on Solactive China Dragons 7 (DE000SY59KE4), is very popular. This is based on the US ‘Magnificent Seven’ and tracks the seven counterparts from China, specifically Alibaba, Baidu, BYD, JD.com, Meituan, Tencent and Xiaomi.

Invest in cryptos with Coinbase

Nvidia, Tesla, MicroStrategy - US tech stocks continue to dominate the individual stocks. It is striking that Coinbase is also making an appearance. Anyone who wants to bet on cryptocurrencies often does so via the crypto platform's shares, explains Kesselhut. As far as German shares are concerned, the focus is on Rheinmetall, SAP, Deutsche Bank, Commerzbank, Bayer and Deutsche Telekom. Car manufacturers, on the other hand, which are currently in the news, do not play a major role. Discount certificates are also in demand here, for example on Deutsche Telekom, Commerzbank and Bayer. At ICF, a bonus certificate with a cap on Rheinmetall (DE000DQ9AGN7) is strong in terms of turnover.

According to Kesselhut, factor long warrants with leverage 3 on MicroStrategy (DE000SN06F28) and call warrants on SAP (DE000SW7HYV7) are in demand in the leveraged products business. There still seems to be a lot of optimism regarding Nvidia - at ICF, the five best-selling products on Nvidia are all bulls, including call warrants (DE000HS75CE2) and open-end knock-out calls (DE000PG83RQ6). The Nvidia share has long since made up for the setbacks from the summer and recently rose to a new all-time high. Confidence also dominates with regard to Rheinmetall (DE000PC8JHH2). The share price has also risen sharply recently, doubling since the beginning of the year and more than sevenfold since the start of 2022.

Crypto certificates top sellers, gold and oil also on the agenda

However, two crypto certificates were the best-selling products at ICF in the past four weeks: the tracker certificate on ‘Der Aktionär’ Krypto TSI (CH1171791515) and the tracker certificate on ‘Börse Online’ Best of Krypto (CH1171793321). Also in demand: a tracker certificate on Dogecoin (CH1129855263), the parody cryptocurrency that Elon Musk has been promoting for years.

The price of gold had already reached a new all-time high at the end of October, but has been weaker since then. Popular at ICF: open-end knock-out products on the gold price, often bearish (DE000HT0LY15). The oil price continues to fluctuate strongly. After exceeding USD 90 in April, North Sea Brent crude cost less than USD 70 in September and is now just under USD 74. At Société Générale, the factor long warrant on Brent Crude Crude Oil ICE Rolling with leverage 3 (DE000SB3T5M4) is used.

From Anna-Maria Borse © 21 November 2024, Deutsche Börse AG

Anna-Maria Borse is a financial and business editor specialising in the financial market/stock exchange and economic topics.
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