Using trading tools to beat market volatility caused by Covid-19

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Using trading tools to beat market volatility caused by Covid19

"DLCs have been very useful for my clients and me in the current market. We've been trading the 5 times long and short DLCs on the Straits Times Index stocks to capture the short-term swings," Mr Toh told The Business Times.

Mr Toh believes that these are"good additional instruments that clients can utilise to either protect their portfolio or make money from the current market". Ms Zhou tells her clients that with a comprehensive stop loss strategy, DLCs can be highly profitable if traders can manage their risk and portfolio size well."My most profitable intraday trade was on the 5 times long Tencent DLC with an S$11,000 profit."

Globally, a handful of hedge funds betting on bonds or volatility have reaped profits from the turbulence. FT reported that one of the biggest gains came from Roy Niederhoffer's New York-based computer-driven hedge fund firm. In an interview with BT last week, Michael Syn, SGX's head of equities and derivatives, said the exchange has seen high activity levels from individual traders, regional and international brokers as well as institutional risk managers.

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