How the Japanese earthquake hurt speculators that bet millions of lei on DAX index
Autor:
Adrian Cojocar
15.03.2011
On the German bourse's plunge on Tuesday, as a reaction to plummeting Japanese markets, transactions with German DAX-based turbo long certificates on the BSE, among the most liquid securities on the Bourse in the past month, have been suspended.
Practically, at the moment DAX index dropped by more than 4%
at the opening of yesterday's session to less than 6,750 points,
set as a barrier for the respective certificates, they were
suspended from trading and the investors that bought such
securities on Monday, at prices of over 19.5 lei/each, will recover
only 7.5 lei/each, equalling the repurchase value calculated by
their issuer, Erste Bank.
The investors that have bought such long certificates over the
last few days have bet on a rally of international markets and
particularly of the German one, after the plunges caused by the
Japanese earthquake.
However, high market volatility makes such bets extremely
risky.