Although central banks are expected to announce further support measures in December, most of the good news appears to be embedded in the market. Stability gives hope for a gain of 35% in three weeks.
Our last “stock market derivative advice” published on this site on November 5 relating to stability on the CAC 40 (code: LU2088519850) did not bring us any luck. With two limits set at 4500 and 5400 points, the certificate was deactivated during the November 10 session with the CAC 40 index overflowing the threshold of 5400 points upwards. Recommended at a price of 8.69 euros, the stability lost all of its value and was therefore not reimbursed by Societe Generale by the November 20 deadline. However and even if the Parisian market has clearly returned to a bullish configuration for 2021 with a possible return to the old records of 6111 points, it would seem both healthy and logical to us to witness some profit taking after the formidable rally of the month of November. Most of the good news (disappearance of political risk in the United States, arrival at the end of the year of the first vaccines) seems to be integrated. On December 10 and 16, the two European and American central banks will announce new injections of liquidity. But here too the market has already anticipated it.
It’s double or nothing with stability
This is why we again recommend taking a position on a stability CAC 40. The one selected is issued by Societe Generale with a deadline set on December 18 and two limits located at 4400 points for the lowest and at 5800 points for the highest. . Now worth 7.40 euros, the stability will be reimbursed 10 euros at maturity provided that the Parisian market continues to evolve until then within the corridor defined by the two terminals. The performance could thus reach 35.1% within three weeks. But beware of the risk of deactivation of the certificate if the index exits the fluctuation zone. The product will lose all of its value.
Our advice: buy a stability CAC 40 issued by Société Générale (code: LU2088561381); deadline: December 18, 2020; terminals: 4400/5800 points; price: 7.40 euros; amount: 1