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2009-07-06

New Commodity Call Warrants - USO-C1 and GLD-C1

Two new commodity exchange traded funds (ETFs) ware introduced by OSK Investment Bank Bhd at last Wednesday and will be listed on July 8. The new warrants is as below:-
  1. United States Oil Fund (USO-C1)
  2. SPDR Gold Trust (GLD-C1)
Both are European-style cash settled warrants with 9 months lifespan.

From the latest data by "The Edge", one month crude oil futures traded on the New York Mercantile Exchange gained USD22.13 or 49.6% to USD66.73 per barrel last Thursday. Meanwhile, gold's spot price increased USD47.75 or 5.4% to USD929.80 per ounce last Thursday from USD882.05 per ounce on Dec 31, 2008.



However if you compare oil price in one month ago and gold price at end of last year you will see the trade is up but if you compare the oil and gold price start month of APR 2009 you will know the gold price is in correction and oil price is about to get stable before enter correction. For me this two investment warrants is profitable just that you can not buy now, need to wait till the gold price end the correction by 4Q2009 and oil price get stable by end of the year. But community price drop down will be zip zap so with this warrants for shots team investment will be profitable.

Nevertheless, the concern is that the lifespan of the two structured warrants is only 9 months, which may be considered too short if commodity prices stage a major rally.

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