whoever is picking up the oppies, page-15

arbitrage - where is the profit? I don't quite get the mechanics of the suposed arbitrage players. The differential between the options and the sp has rarely been more than half a cent out either way (3 cents +/- .5 cents difference). So far, then there has only been about a half cent in it either way.

Sure, if you are set to buy shares to hold, then buying options and converting at a .5 cent discount is worth it (Worth about 5%).

If however, the intention is to profit from the diffential i.e. buy at a discount, convert and sell at full price at a 5% profit, you could easilly be onto a loser with a volatile share such as this one.

The shareholding is dead for something like 2 weeks from the date you convert. The sp can drop drastically or the differential reverse itself. In other words, you could be better off buying the security you want rather than dicking around withconversion and risking being incomunicado when things head south.

I can see a possible play around the last day of options trading (Jan 23rd I think) when those hoping for a lift in the price to sell and fund conversion or just to sell at max profit finally have to sell at any price if they haven't the funds to convert. But this is a limited play, and my suspicion is that the fpo's will be discounted by this at the time, therefore eroding any arbitrage on that day as well.

So, what am I missing? Where is the profit the "Professional Arbitrage Players" are seeking?

If there is a profit to be made, I may need to revise my strategy vis a vis selling or converting my substantial options holding.

Disclosure: 2.39 million option and not enough cash to convert!

Kind regards,

Keith.