this is generally how I find it works when it comes to oilers and why the SP is not going anywhere ATM
From my experience and purely from a money making point of view , for me the key to success is to sell before or close to spud date and to buy back some time after the well fails .
this is my simple strategy and is dead easy until you are hit with a rare success and watch the stock you just sold skyrocket however one solution is to sell half at least you still get to retain an interest in the well and you often get a free ride if you enter early enough,
in TTEs case there hasnt been any spike prior to the spud due to the option placement before, the stacking at 014/015 you will find are brokers supporting the S.P for the big boys to dump into.
peak prices of the stock are often generated by such picturesque phrases such as "the rig is on its way " or "the rig is onsite and preparing to spud". However an annoucement that the well has actually spudded and is at a depth of 250 m is more likely to greeted with a deathly lull in trading and a minor retrace .
This lull in trading will usually continue during drilling until the moment of truth arrives ( the target depth ) the only thing at this stage that will increase the price is actually getting some sort of show , this happens occasionally but it is no way guaranteed , when it does happen though the market can get a bit hyped up and its best to sell, if you can bear it ..
Therfore if you purchase on spudding with the intention of selling before the target depth the chances are you will be making a loss but if you wish to take a straight out bet on the outcome of the well be prepared to loose half if the well fails but at least your money hasnt been tied up waiting for the well to happen .
and what happens if the impossible happens and the well hits a pay zone , thats easy its usally best to sell before the reality of the development costs set in .
thats why the markets are great everyone has there own opinion on how to buy and sell a stock .
good luck with your trading
GEV Price at posting:
16.0¢ Sentiment: None Disclosure: Not Held
