UNIBAIL-RODAMCO-WESTFIELD FR0013326246

Unibail Rodamco Westfield 2023, Rise or Fall ?

1. Lamsrust 23 november 2023 19:39

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   Franse aandelen schreef op 22 november 2023 19:28:

   [...]
   
   All true. Some buyers might have difficulty to get financing, true. But David Simon for instance is potentially selling already stake in Klepierre if Klepierre share goes up 20% through the new exchangeable note. He has got the cash already :-) And buyers like David Simon buy when market is depressed and not once it will have gone up. I don t know if he wants to buy. I am just saying if he wants to buy US assets he won t wait too long to make an offer ... because he knows other potential buyers will be able to finance soon as well ... :-)
   

   I assume you are now referring to the US flag ships as David Simon will not be interested in the US regionals. According to the Q3, 2023 report SPG can finance itself now against 6%. The current niy of URW's flag ships is 4.6%. Suppose URW is prepared to give a 20% discount, i.e. the niy will be 5.8% then which is still below SPG's cost of finance. So I think currently SPG will not come with a competitive bid as its marginal financing costs are still too high, unless David Simon is prepared to take a risk and has SPG take up short term finance which will be replaced with long term finance once the cost of debt has come down provided that interest decrease of course which is not carved in stone.
   
   Currently the US flag ships are according to me only interesting for full equity financed buyers like pension funds and insurance companies. But these parties normally step into the market once assets are fully stabilized, i.e. they prefer to pay a lower niy in exchange for less risks. URW is currently stabilizing assets with capex investments in order to lower the vacancy by replacing a.o. empty big boxes by mixed use.
   
   As an intermediary step I see URW seek JV investors for the US flag ships they still own for 100% like Century City and Old Orchard.
2. Lamsrust 23 november 2023 19:52

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   Franse aandelen schreef op 23 november 2023 16:52:

   [...]
   
   Dear Branco,
   
   months Nov, Dec, Jan are usually very good months. So if we are end of January at 65-75 and no cash div announced and share drops a bit to 60-65 you want to double your position then ? :-)
   
   Double is now in my opinion... I read today the thread* of URW on this forum beginning 2020 until Covid... Everybody was bullish and buying... and now with stock trading at 20% of its high (still -80%) and 30-40% of pre Covid and a fraction of its NRV and NTA you want wait and maybe double in February ?
   
   Just asking to better understand the logic :-) :-)
   
   * thread of URW before COVID, interesting to flip through from January to November 2020
   

   Of course Branco P has to react himself too, but I would like to add this.
   
   I do not see URW's share price rise to EUR 65 - 75 within the next two months in a normal going concern situation, i.e. only small EUR and US regional sales, as the indebtedness of URW is still perceived as high by the markets. Besides that if the whole equity market goes down again with 5 to 10% on recession fear or whatever fear - the price decline of URW is always amplified. So a share price of URW below EUR 50 until the presentation of the 2023 results can certainly not be excluded.
   
   I also still want to increase my holding in URW but wait for lower entry levels, i.e. sub EUR 50.
3. Franse aandelen 23 november 2023 23:01

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   quote:

   Lamsrust schreef op 23 november 2023 19:39:

   [...]
   
   I assume you are now referring to the US flag ships as David Simon will not be interested in the US regionals. According to the Q3, 2023 report SPG can finance itself now against 6%. The current niy of URW's flag ships is 4.6%. Suppose URW is prepared to give a 20% discount, i.e. the niy will be 5.8% then which is still below SPG's cost of finance. So I think currently SPG will not come with a competitive bid as its marginal financing costs are still too high, unless David Simon is prepared to take a risk and has SPG take up short term finance which will be replaced with long term finance once the cost of debt has come down provided that interest decrease of course which is not carved in stone.
   
   Currently the US flag ships are according to me only interesting for full equity financed buyers like pension funds and insurance companies. But these parties normally step into the market once assets are fully stabilized, i.e. they prefer to pay a lower niy in exchange for less risks. URW is currently stabilizing assets with capex investments in order to lower the vacancy by replacing a.o. empty big boxes by mixed use.
   
   As an intermediary step I see URW seek JV investors for the US flag ships they still own for 100% like Century City and Old Orchard.
   

   Interesting and well explained. Thanks!
4. Franse aandelen 23 november 2023 23:07

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   quote:

   Lamsrust schreef op 23 november 2023 19:52:

   [...]
   
   Of course Branco P has to react himself too, but I would like to add this.
   
   I do not see URW's share price rise to EUR 65 - 75 within the next two months in a normal going concern situation, i.e. only small EUR and US regional sales, as the indebtedness of URW is still perceived as high by the markets. Besides that if the whole equity market goes down again with 5 to 10% on recession fear or whatever fear - the price decline of URW is always amplified. So a share price of URW below EUR 50 until the presentation of the 2023 results can certainly not be excluded.
   
   I also still want to increase my holding in URW but wait for lower entry levels, i.e. sub EUR 50.
   

   Regarding stock price I have as stated a different more optimistic view, maybe because I am fully invested now... One sees often what one wants to see :-) It is a learning process not to see what one wants to see but what is likely ... :-)
5. Lamsrust 24 november 2023 00:26

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   Franse aandelen schreef op 23 november 2023 23:07:

   [...]
   
   Regarding stock price I have as stated a different more optimistic view, maybe because I am fully invested now... One sees often what one wants to see :-) It is a learning process not to see what one wants to see but what is likely ... :-)
   

   I am invested for many years in URW. When the stock price approached EUR 100 pre covid, which was 8x FFO then, URW was already recommended by private bankers of Dutch banks. See where we are now. I believe URW will surpass that level again, but I think it will take another 2 to 3 years as URW first wants to optimize its US portfolio by lowering vacancy by increasing occupancy and repurposing empty big boxes/parts of a mall into mixed use. So URW LTV will stay elevated for a while, however URW adds value meanwhile. Until now the market prices in this value addition only very limited.
6. ebace 24 november 2023 07:09

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   i'm optimistic about URW, but this does not mean the price of the share will increase significantly over the next year. The whole sector needs to refinance their loans. With increased interest rates these loans become more expensive for the companies which impacts valuation and therefore also the price.
   When the overall economy declines, the banks exposure to real estate might decrease, since the banks do not want to take on the risk.
   we have seen SPG setting up a construction to raise money on their Klepierre's share, which is good. Smaller companies need to go to banks. When they fall it will impact the whole sector.
   Prices for real estate shares most likely will decline when economy and interest rates stay the same or when interest rates go up / economy down and visa versa.
7. Franse aandelen 24 november 2023 10:37

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   quote:

   Lamsrust schreef op 24 november 2023 00:26:

   [...]
   
   I am invested for many years in URW. When the stock price approached EUR 100 pre covid, which was 8x FFO then, URW was already recommended by private bankers of Dutch banks. See where we are now. I believe URW will surpass that level again, but I think it will take another 2 to 3 years as URW first wants to optimize its US portfolio by lowering vacancy by increasing occupancy and repurposing empty big boxes/parts of a mall into mixed use. So URW LTV will stay elevated for a while, however URW adds value meanwhile. Until now the market prices in this value addition only very limited.
   

   Dear Lamrust, you are too pessimistic about stock price. Look what you said on 20 October and where we are now (54,74 EUR) :
   
   Quote of you:
   "Eens, de markt is nu gewoon extreem negatief over vastgoed. Kijk naar Klepierre dat de balans op orde heeft, en ook maar tegen 9x de EPS noteert en bij een pay out ratio van 75% een dividend rendement heeft van 8.3%.
   
   Dan weten we in ieder geval waar URW minimaal naar toe gaat, zodra de balans op orde is, nl. EUR 80 à 90.
   
   In juni kocht ik op EUR 42,50 fors bij en ik overweeg dit weer te doen. Alleen vrees ik dat het sentiment nu nog wat negatiever is en de koers nog wat dieper kan wegzakken.
   
   Overname van URW door PE ben ik niet bang voor, omdat ticket heel hoog is en Niel in de weg zit."
   
   Maybe since the recovery takes so long time you lost your optimism? The stock went down on unjustified extreme fear. The fear is now abating ... and we will have a strong and fast yo-yo effect up after 8 years yo-yo effect down ... Kind regards.
8. Franse aandelen 24 november 2023 10:45

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   Of course the main question is :
   Is the interest rate increase in US and Europe over? If yes, then the fear that interest rates could go to 6%-7% which brought price to its knees this year (41,30 EUR) will abate...
   
   However if you believe in a scenario that 10 year US interest rates go again above 5% and that the fear of 6% and 7% rates returns then I understand that you hesitate.
   
   Kind regards.
9. Lamsrust 24 november 2023 11:02

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   quote:

   Franse aandelen schreef op 24 november 2023 10:37:

   [...]
   
   Dear Lamrust, you are too pessimistic about stock price. Look what you said on 20 October and where we are now (54,74 EUR) :
   
   Quote of you:
   "Eens, de markt is nu gewoon extreem negatief over vastgoed. Kijk naar Klepierre dat de balans op orde heeft, en ook maar tegen 9x de EPS noteert en bij een pay out ratio van 75% een dividend rendement heeft van 8.3%.
   
   Dan weten we in ieder geval waar URW minimaal naar toe gaat, zodra de balans op orde is, nl. EUR 80 à 90.
   
   In juni kocht ik op EUR 42,50 fors bij en ik overweeg dit weer te doen. Alleen vrees ik dat het sentiment nu nog wat negatiever is en de koers nog wat dieper kan wegzakken.
   
   Overname van URW door PE ben ik niet bang voor, omdat ticket heel hoog is en Niel in de weg zit."
   
   Maybe since the recovery takes so long time you lost your optimism? The stock went down on unjustified extreme fear. The fear is now abating ... and we will have a strong and fast yo-yo effect up after 8 years yo-yo effect down ... Kind regards.
   

   I have certainly not lost any optimism,, but i think it will take much more time for the URW share price to recover to EUR 80 - 90. I said that also in this quote, i.e. “zodra de balans op orde is” with which I mean a LTV comparable to KLEP i.e. 38% including hybrids. This can only be achieved in two ways (i) selling significant part of US flagships or (ii) keeping the profit in the company for many years.
   
   Conclusion: I remain very optimistic but I expect it will take much more time before the market will price it in.
10. Franse aandelen 24 november 2023 11:12

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    quote:

    Lamsrust schreef op 24 november 2023 11:02:

    [...]
    
    I have certainly not lost any optimism,, but i think it will take much more time for the URW share price to recover to EUR 80 - 90. I said that also in this quote, i.e. “zodra de balans op orde is” with which I mean a LTV comparable to KLEP i.e. 38% including hybrids. This can only be achieved in two ways (i) selling significant part of US flagships or (ii) keeping the profit in the company for many years.
    
    Conclusion: I remain very optimistic but I expect it will take much more time before the market will price it in.
    

    Dear Lamrust,
    
    I quote today's FT about what XN, URW's main share holder said (in URW-unrelated context):
    "But Niel has proved many people wrong in the past. “I have built my career on the pessimism of others,” he said."
    
    www.ft.com/content/f6c19a63-aa64-4bc9...
    
    P.S. and in the end : URW's rise is only a question of time. You think it will take longer, I think you may be right but maybe it even rises faster :-) So we have common ground anyways, both being long URW.
12. Lamsrust 24 november 2023 15:35

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    Franse aandelen schreef op 24 november 2023 11:12:

    [...]
    
    Dear Lamrust,
    
    I quote today's FT about what XN, URW's main share holder said (in URW-unrelated context):
    "But Niel has proved many people wrong in the past. “I have built my career on the pessimism of others,” he said."
    
    www.ft.com/content/f6c19a63-aa64-4bc9...
    
    P.S. and in the end : URW's rise is only a question of time. You think it will take longer, I think you may be right but maybe it even rises faster :-) So we have common ground anyways, both being long URW.
    

    “I have built my career on the pessimism of others,”
    
    I can rest you assured, I build a large part of my investment capital in the same way by investing when no one was interested. In that journey I also experienced that achieving a profitable exit sometimes takes more time than anticipated.
    The benefit of investing in real estate through a listed fund is that you are not fully invested from t=0, but that you can snap up along the road shares for a lower amount of your initial acquisition price. Of course the current price of EUR 55 is already interesting, but adding shares around EUR 45 is even more interesting.
13. Branco P 24 november 2023 22:03

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    Franse aandelen schreef op 23 november 2023 16:52:

    [...]
    
    Dear Branco,
    
    months Nov, Dec, Jan are usually very good months. So if we are end of January at 65-75 and no cash div announced and share drops a bit to 60-65 you want to double your position then ? :-)
    
    Double is now in my opinion... I read today the thread* of URW on this forum beginning 2020 until Covid... Everybody was bullish and buying... and now with stock trading at 20% of its high (still -80%) and 30-40% of pre Covid and a fraction of its NRV and NTA you want wait and maybe double in February ?
    
    Just asking to better understand the logic :-) :-)
    
    * thread of URW before COVID, interesting to flip through from January to November 2020
    

    take a look at the market interest rates and especifically to what happened in 2022, for example:
    www.iex.nl/Rente-Koers/61375437/IRS-5...
    (affecting interest rates on new loans)
    
    Also look at what happened to state bonds, for example:
    www.iex.nl/Rente-Koers/190118309/Fran...
    (affecting yields of valuations of properties)
    
    The situation in 2020 was totally different. I was sure people would go back to the shopping malls after the covid-drama.
    
    Now we are at a point where higher rents will truly hurt real estate companies and (also) lower rents could really boost the stocks.
    
    an unexpected high or low inflation numbre could really affect interest-rates short term and stockprices of real estate companies short term.
    
    Also some recession-news could hurt stocks in general. Briefly.
    
    So yes. 70 euro from now until end of februari is possible. Also 40 euro is possible. Also both are possible. A lot of movement, as we saw in 2023: 54 --> 42 --> 53 --> 42 --> 55
    
    I am happy with my current position (bought at average 43,89 euro) and I would maybe sell a bit above 65 euro and buy it back under 50.
    
    I made extra money this year bij writing out of the money put options when URW was on lows. Strikes 35 / 38 / 40 / 43. Never was assigned to buy the stocks, but I wouldn't have felt bad when I would have had to buy some extra stocks at those prices.
    
    If the stock stays volatile I will continue doing so in 2024.
    
    Important to see is: will there be property sales untill the end of 2023? If yes, maybe I will also buy some extra stocks depending on where we are at that point and the details of the deal.
14. Franse aandelen 24 november 2023 22:39

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    quote:

    Branco P schreef op 24 november 2023 22:03:

    [...]
    
    Good evening Branco,
    
    I answer in bold:
    
    take a look at the market interest rates and especifically to what happened in 2022, for example:
    www.iex.nl/Rente-Koers/61375437/IRS-5...
    (affecting interest rates on new loans)
    
    Also look at what happened to state bonds, for example:
    www.iex.nl/Rente-Koers/190118309/Fran...
    (affecting yields of valuations of properties)
    
    Answer: Yes, I exactly because market rates went up so much, they decreased the value in share price.
    
    
    The situation in 2020 was totally different. I was sure people would go back to the shopping malls after the covid-drama.
    
    Answer : Yes, me too.
    
    Now we are at a point where higher rents will truly hurt real estate companies and (also) lower rents could really boost the stocks.
    
    Answer : exactly
    
    an unexpected high or low inflation numbre could really affect interest-rates short term and stockprices of real estate companies short term.
    
    Also some recession-news could hurt stocks in general. Briefly.
    
    Answer : true
    
    So yes. 70 euro from now until end of februari is possible. Also 40 euro is possible. Also both are possible. A lot of movement, as we saw in 2023: 54 --> 42 --> 53 --> 42 --> 55
    
    Answer : true
    
    I am happy with my current position (bought at average 43,89 euro) and I would maybe sell a bit above 65 euro and buy it back under 50.
    
    Answer : the past three years were Swing trading years. Buy low, sell after 20%, 25% rise. However going forward, this strategy will only work once or twice more in my humble opinion and the investor using the strategy going forward will miss the +100% to 250% rally after 20-30% upside swing trade
    
    I made extra money this year bij writing out of the money put options when URW was on lows. Strikes 35 / 38 / 40 / 43. Never was assigned to buy the stocks, but I wouldn't have felt bad when I would have had to buy some extra stocks at those prices.
    
    Answer : very nice strategy, well done
    
    If the stock stays volatile I will continue doing so in 2024.
    
    Answer : the stock will be volatile but not because of swings up and down but an huge, enormous upside swing at some point
    
    Important to see is: will there be property sales untill the end of 2023? If yes, maybe I will also buy some extra stocks depending on where we are at that point and the details of the deal.
    

    
    
    Answer : you know already now, that if there is a deal, the numbers will be ok because URW does not make stupid, too discounted property sales.
    
    Conclusion: You have done very well over the last 3 years. Especially doing swing trades and selling options. Going forward that might either not work any more or once or maximum twice more, but thereafter if you continue doing swing trades you miss the huge upside trade in my humble opinion.
    
    Kind regards.
15. Branco P 25 november 2023 11:44

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    quote:

    Franse aandelen schreef op 24 november 2023 22:39:

    [...]
    
    Answer : you know already now, that if there is a deal, the numbers will be ok because URW does not make stupid, too discounted property sales.
    
    Conclusion: You have done very well over the last 3 years. Especially doing swing trades and selling options. Going forward that might either not work any more or once or maximum twice more, but thereafter if you continue doing swing trades you miss the huge upside trade in my humble opinion.
    
    Kind regards.
    

    true, in 2022 I also made money with writing out of the money call options (at stock peaks) but I saw that in 2023 I only did the writing of puts.
    
    I agree that a major upswing of the stock price is now a risk when writing out of the money calls. So my feeling for short term and lang term is flat or up. But not down. That does not mean that the stock can’t again go to 45. And if it does, I will be buying more shares and/or writing OTM puts.
    
    I will also not be selling my entire position at peaks. Maybe max 25% I would be thinking of selling on a serious peak (and buy it back if we go lower. If it does nog go lower: also OK)
16. Franse aandelen 25 november 2023 12:40

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    quote:

    Branco P schreef op 25 november 2023 11:44:

    [...]
    
    true, in 2022 I also made money with writing out of the money call options (at stock peaks) but I saw that in 2023 I only did the writing of puts.
    
    I agree that a major upswing of the stock price is now a risk when writing out of the money calls. So my feeling for short term and lang term is flat or up. But not down. That does not mean that the stock can’t again go to 45. And if it does, I will be buying more shares and/or writing OTM puts.
    
    I will also not be selling my entire position at peaks. Maybe max 25% I would be thinking of selling on a serious peak (and buy it back if we go lower. If it does nog go lower: also OK)
    

    Hi Branco,
    
    interesting (that you stopped writing calls and you continue writing puts only).
    
    You, Lamrust and me are on the same page and I know that any strategy can be wrong with hindsight (= knowledge of the past).
    
    To resume : the situation is evolving. 2008 to 2015 best was to invest a lot in 2008 and hold (and write puts only). Best in 2015 to 2023 was swing trading and writing calls and puts). Going forward the best might be again a 2008-2015 strategy : buy a lot now and hold and write puts ...
    
    I have options strategies on my to do list. For the moment I am long only (which is not nice if there are strong reversals such as since post-June 2021). With hindsight I would have done better with a swing strategy in H2 2021, FY 2022, 2023YTD. However that period allowed me nevertheless to increase multiple fold my position in URW. Also we are lucky to be - it seems with a good managed French company - now. Many French stocks had huge drawdowns ( Air France, Alstom, Atos, Casino, Clariane, EDF, Orpea, Nexity, Sanofi, Societe Generale, Worldline, etc. ) as well however their outlook is mostly very clouded and much more uncertain than the outlook for URW.
    
    Basically URW had tough years as well, but outlook seems to me much more clear, positive and I would not be surprised if going forward URW is in 2024, 2025 amongst the best stocks in CAC40 if not STOXX Index (600 stocks). This is why I am continuing to position myself long only and not Swing trading. I might of course be wrong. We will see...
    
    Best regards.
17. Branco P 25 november 2023 16:15

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    The writing of puts can also sometimes backfire. For example in the last couple of months i wrote two OTM puts AMG but way too soon. In the meantime I did also buy 200 stocks at an average 17,20 (that was nice). I also still have a written MAR2024 24P and a written SEP2024 28P in portfolio. So worst case I will eventually have 400 stocks AMG at an average 21,60. Buying them last friday for 21,28 would than have been cheaper.
    
    The written puts I can also try to "roll over" at some time to (for example) JUN2024 23P or 22P and DEC2024 27P or 26P hopefully without paying extra. Best case would be if the stock goes up fast at some point and at some point I can buy the puts back for small amounts or they will expire worthless.
    
    Should the stock go down to (let's say) 10 euro in one straight line... I will eventually be shareholder of 400 stocks at an average 21,60 by the end of 2024.
    
    When I look back I should have understood better that AMG was not a very smart stock to start writing OTM puts in a strong downtrend.
    
    The big advantage of writing options is that time works in your favor, but you should really only do it with stocks that you truly would like to have in portfolio long term for the strike price.
18. Franse aandelen 25 november 2023 16:39

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    quote:

    Branco P schreef op 25 november 2023 16:15:

    "The big advantage of writing options is that time works in your favor, but you should really only do it with stocks that you truly would like to have in portfolio long term for the strike price."
    

    Dear Branco,
    
    I fully agree that writing puts should only be done on stocks one wants.
    
    My current situation is that I used the cash available to buy stocks and I normally keep cash but observing URW I did not want to do the same mistake like in 2008 where I did not invest at lows but instead was thinking that it was clever to be 100% cash at high interest rates (5%). However the short term interest rates fell fast and the stocks moved up fast and I was still cash... So I was too risk averse. In 2020 I went in some banking and industrial stocks from April 2020 (which was great). And URW in late summer 2020 and autumn, winter 2020 doing many swing trades (which was very good). Results were fantastic (more than 100% on total sums invested) but the error was I invested not enough and I went out of many stocks too soon (taking small swing trade gains instead of waiting some more weeks or months and take larger gains).
    
    2023 I compare to rather 2008 because there also short term interest rates were high, yield curve inverted and REITS were having real trouble... This time I don t want to put too little because it is in phases like now you can make money.
    
    Caveat: However I know that of course now is not 2008. 2008 the whole market was depressed. And now there are a few sectors like some European banks and REITS that are depressed and Vol is very low and not high... So I know that of course my strategy is also risky and the future is always an unknown ... However something tells me that the REIT situation is the best since at least 2008 or even better than 2008 for REITS...
19. Branco P 25 november 2023 21:51

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    • Branco P

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    True, regarding banks, for example ABN Amro is trading very low...
    
    I believe (if I remember correctly) that all the relevant interest rates in 2008 were clearly higher than the interest rates are now, maybe on average some 150bpt to 200bpt higher? It is hard to find good data though.
    
    So I do not expect the interest rates to go substantially lower (because current levels are in fact almost "healthy") unless there will be substantial economic problems, but in that case the lower interest rates will probably be preceded by lower stock prices. yield curve is also getting less inverted I believe.
    
    Nobody knows of course, but I myself I am currently at around 42% cash and thinking of selling some more stocks still (approx 3%).
    
    I do also feel that there are good opportunities in REITS at the moment, especially those with good quality real estate and relatively low LTV, high valuation yields, and long term fixed interest rates on the loans.
    
    I have a small position in URW. Bigger ones in KLEP and ECP. There is more to gain with URW but also the risks are higher because the Westfield portfolio was not the best quality. Had Unibail not bought that Westfield Portfolio, we would currently have been at 125 euro probably (plus we would have received dividend in the last few years).
20. HCohen 26 november 2023 12:42

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    • HCohen

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    Deutsche Bank verhoogt het koersdoel een beetje op 23 nov(van 50E naar 53E) en op 21 nov geeft 'een analist' een buy af
    (ik weet niet welke, want ik heb geen betaald abo bij Trivano).
    
    Het profiel 'concensus analisten' verbetert wel aardig, zie link(kolom per 23 nov '23 en gemm advies nu op 57,89E).
    www.trivano.com/aandeel/unibail-rodam...
21. Franse aandelen 26 november 2023 14:28

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    quote:

    Branco P schreef op 25 november 2023 21:51:

    True, regarding banks, for example ABN Amro is trading very low...
    
    I believe (if I remember correctly) that all the relevant interest rates in 2008 were clearly higher than the interest rates are now, maybe on average some 150bpt to 200bpt higher? It is hard to find good data though.
    
    So I do not expect the interest rates to go substantially lower (because current levels are in fact almost "healthy") unless there will be substantial economic problems, but in that case the lower interest rates will probably be preceded by lower stock prices. yield curve is also getting less inverted I believe.
    
    Nobody knows of course, but I myself I am currently at around 42% cash and thinking of selling some more stocks still (approx 3%).
    
    I do also feel that there are good opportunities in REITS at the moment, especially those with good quality real estate and relatively low LTV, high valuation yields, and long term fixed interest rates on the loans.
    
    I have a small position in URW. Bigger ones in KLEP and ECP. There is more to gain with URW but also the risks are higher because the Westfield portfolio was not the best quality. Had Unibail not bought that Westfield Portfolio, we would currently have been at 125 euro probably (plus we would have received dividend in the last few years).
    

    Dear Branco,
    
    if you are a private professional client and you trade through your broker account options, like selling OTM (out of the money) PUT options on URW. How does the exchange of the delta margin work?
    
    For instance imagine there is a 3 month to maturity PUT option with 45 strike and you sell it in t0 for a premium, let us say 3 EUR ( being a fictitious amount). The stock is at 54 at t0. Then URW drops to let us say 50 in t1 and the premium is worth 5 EUR now. You agree that your brokerage account must approvison that extra 2 EUR (5-3= 2) for delta exchange between t0 and t1.
    
    Questions :
    1) What initial margin does the broker request at the outset? The maximum risk?
    2) which amount do you need to provision for delta margin ?
    3) how often is delta exchanged between your brokerage account and counterparty ( be it EUREX, EURONEXT, bank)
    4) is this automatically deducted from your brokerage account if stock drops ?
    5) If stock goes up, is delta margin automatically recredited ?
    6) Is your broker requesting that you put up a cash balance for all your potential risk (= buying the stock at 45 times x number of shares contracted ?
    7) do you earn interest rates on you delta margin ?
    8) Do you trade via exchanges or do you trade OTC ?
    
    Sorry for all the questions, but I want to get a feel of the implications for selling options as a private investor. I find the idea interesting to earn money through receiving a premium and in worst case you buy a stock you like at the strike price ( and strike price is already often a good price (if option not too much ITM), since lower than the price at outset of the OTM trade).
    
    Kind regards.
    
    P.S. : I guess you need to be qualified MIFID wise in highest risk category and probably even better as professional investor in order to enter into such transactions.