How to Benefit from the Rise with BIST 30 Derivatives?

The Way to Invest in Volatile Markets at Borsa İstanbul

Prices at Borsa İstanbul frequently show sharp fluctuations. The fragile Turkish stock markets respond to rises with enthusiasm, while they tend to react to falls in a panic-stricken manner. Therefore, investors trading in volatile markets are questioning how to benefit from these movements and how to manage their risks.

BIST 30 Index: Year-End Expectations

The BIST 100 starting the year by surpassing the 12,000 level and the BIST 30 index settling above 13,000 is not only a technical threshold crossing but also indicates a combination of macro optimism and relatively relaxed financial conditions. The inflation figures exceeding expectations create a positive atmosphere, while the decline in bond yields and CDS premiums strengthens the perception of Turkish assets. This situation suggests that index-based movements will become even more active in the forthcoming periods.

BIST 30 Index Warrants

For investors looking to take positions based on index expectations and wanting to define risks in advance, BIST 30 index warrants are becoming an intriguing tool. A warrant is a security that grants the right to buy or sell a specified underlying asset at a predetermined price. Your loss is limited to the amount you initially paid; thus, you can trade with less stress during periods of high uncertainty without the pressure of additional margin calls or leveraged trading.

Call and Put Warrants

There are two main types of BIST 30 index warrants: call (buy) and put (sell) warrants. If you think the index will rise, you should prefer a call warrant; if you believe it will fall, you should opt for a put warrant. A call warrant will be exercised profitably if the index's settlement price at expiration is above the warrant's exercise price; otherwise, it will expire worthless.

Why is the Settlement Price at Expiration Important?

In BIST 30 index warrants, the exercise is based not only on the spot index but also on the futures contract's settlement price at expiration. Therefore, monitoring this price becomes critical, especially when developing short-term strategies.

Position Taking Strategies for Investors

Those looking to take advantage of upward movements can follow the trend in the BIST 30 with call warrants. When a rapid movement occurs, it offers the opportunity to realize your profit without waiting for expiration. Investors expecting a short-term correction can benefit from these fluctuations with put warrants. Index warrants enable taking positions based on the general movement of the market without being dependent on a single stock.

Big Opportunities with Small Investments

BIST 30 index warrants provide flexibility to investors with limited risk, potential profit, and broad market representation. Chosen correctly under the right scenario, warrants can carry the opportunities presented by the index into your portfolio. However, incorrect expectations or excessive trading can impact potential returns.