Many investors don't know what to do now, not sure to buy now or wait after election GE13. Some even thinking of selling or sold.
There are many options, buy, sell, sell later, hold, wait and buy before election, buy after election, buy now and sell two weeks later, etc.
One option is sell KLCI futures. One investor, he has many stocks but he wants to avoid the election uncertainty, so he sell KLCI futures FKLI. If market down, his portfolio down but he make from futures. If market up he lose in futures but his portfolio up.
Why he did this?
He want to sell because want to avoid uncertainty, but don't know which stock to sell. Also, as most of other investors, refuse to sell stocks. So he just sell KLCI futures FKLI.
There are also chances that his portfolio up and KLCI down, or his portfolio perform better than KLCI.
Brokerage also cheaper, about RM20 one FKLI contract. If he sell RM80,000 worth of stocks, brokerage is about RM350.
The price of FKLI is now trading at discount. If market does not move, easily lose few points worth few hundreds per contract.
FKLI contract will expire. Need to roll to next month and incur additional brokerage and may get prices that are not favourable. If sell March or June contract, the discount is much bigger.
There is a possibility that KLCI up and his portfolio down. Or FKLI perform better than his portfolio. Meaning he lose in FKLI more than he make in his portfolio.
How many FKLI contracts to sell is a question. 1600 point X RM50 is about RM80,000 per contract.
There are many advantages and disadvantages of selling FKLI. He sold it just to avoid uncertainty, his portfolio is larger than the FKLI contract that he sold. He does mind the minor prices.
I was right in my article on MBSB Warrant recently. With MBSB warrant performed better than MBSB.
P&O quarterly financial result normal. Low PE ratio with good dividend yield and a potential special dividend.
Freight Management quarterly financial result normal. Growth potential is there but not high. Reasonable good dividend yield.
QL result not so good. As I have mentioned in my earlier articles that I don't know why most brokers still recommend buying QL stock, saying PE ratio reasonable and got profit growth potential. They said QL also is a defensive stock, still can make profit during bad economy. But QL always disappoint us recently.
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