Hi, all. i've been so excited and rather worried about this boom of cryptocurrency market nowadays.
But it's looking that there still are some good chance to get huge benefit, if we try to find some.
And Lykke is one of my recent starred lists to invest in.
I decided to be a shareholder of Lykke, and i downloaded an iOS app and noticed that there are 2 options to be a shareholder.
The first is LKK (equity) and the latter one is LKK1y (forwards).
And the price of LKK1y is somewhat higher than LKK, as we can see in the stock market.
But in my thought, it'd be much better to buy LKK instead of buying LKK1y, since there's no benefit to buy
forwards with higher price, which we can't use margin trade or on short position as well.
Can anyone explain what LKK1y buying advantage instead LKK is?
Thanks in advance and sorry for my lack of Eng. since i am learning nowadays.
You are right that there is no advantage in buying forwards if the price is higher then usual LKK, but that was just a temporary and more unusual situation.
In general it can be expected that LKK1Y is cheaper than LKK and the advantage is exactly that. It's possible to buy LKK1Y and to trade it like usual LKK, and/or: To settle it and 365 days after doing that, the user will get LKK 1:1. Disadvantage: Once it's settled it's not possible to trade the forwards anymore, but for Investors who are longterm-focused it doesn't seem to be problem.
Some advantages of the forwards in general: Lykke did a short LKK1Y-crowdfunding in February and while Investors are usually concerned that additional supply on the market might pressure the price, that is not the case with the forwards. Also in one year the supply won't hit the market at once but more float it over time - dependent on the time individual Investors decided to settle their forwards.
Another very interesting point is: It can be seen as a sign of optimism that the LKK1Y-price comes close to LKK, because it means that more and more Investors have settled it and the decreasing supply lifts the price whenever there is demand. Once the price is close to LKK ppl tend to buy LKK of course.
In Short: The forwards have a lot of advantages and reason for interesting market dynamics.
A more in depth explanation about LKK1Y can be found here:
What is Lykke Forward?
https://www.lykke.com/city/blog/what_is_lykke_forward