Latest

Roll position on the S & P500

The start of the vaccination campaign, the arrival of the new Biden administration, the imminent adoption of the stimulus package and the continuation of the Fed’s proactive policies should support the broad US index. After a 40% gain on stability, it is possible to remain exposed to the S & P500 with a turbo call.

At a time when the high price of the equity markets is debating, we believe that their positive graphical configuration will continue. In the United States, the induction of Joe Biden into the White House on January 20 will blow a wind of optimism that will coincide with the vaccination campaign against the covid and the adoption of a stimulus plan of a little over $ 900 billion. At the same time, the Federal Reserve will have confirmed beforehand on Wednesday evening its desire to continue to implement all means to support the restart of the American economy and inject liquidity. This is enough to support the equity markets despite valuation levels effectively stretched by 26.6 and 21.8 times the estimated profits for this year and 2021 (for the S & P500 index) against an average ratio of 16.6 times. Except that it is necessary to take into account the high multiple and the weight of Gafam (Google, Apple, Facebook, Amazon and Microsoft) within the benchmark of the five hundred largest American capitalizations (more than 25%). In an environment of zero or even negative interest rates (after deducting inflation), equity and real estate investments remain by far the most profitable. We recommended on this site on September 25 in “stock market derivatives” a stability issued by Societe Generale (code: LU2088578864) with two terminals located at 2800 points for the lowest and at 3900 points for the highest. Recommended at the time at a purchase price of 7.15 euros, the certificate will, except for last minute surprises, be reimbursed at the end of the week on December 18 at 10 euros with a gain of 39.9%. It is currently worth 9.95 euros.

A leverage of 3.3 times.

It is possible to reinvest the sum on a turbo call still issued by Societe Generale (code: DE000CL7KVT2) with no maturity and a safety threshold set at 2630.25 points below which the American index must not fall. Otherwise, the certificate will instantly lose almost all of its value. To limit this risk, we have voluntarily chosen a certificate with a safety threshold sufficiently distant from the price of the index to give the time necessary for the unwinding of the position in the event of an unfavorable movement on Wall Street. Still, the turbo has an attractive leverage of 3.3 times. So, assuming that the S & P500 index continues to rise to 4062 points for example, the call will appreciate by 32.8%. But be careful, because conversely, a decline of 10% from the US benchmark to 3693 points will result in a loss of 32.9% of the value of the turbo.

Our advice: buy an S & P500 turbo call issued by Société Générale (code: DE000CL7KVT2); term: unlimited; funding level: 2570.7549 points, safety threshold: 2630.2535 points; parity: 100 turbos for 1 index; price: 11.22 euros; portion: 1.

Tags

Related Articles

Back to top button
Close
Close