Hi Terase -
Why would you "move a lot more funds back into 88E ordinary shares" & not the Oppies? The following is an extract from the last part of my post @ 23.05pm last night (Tuesday) - to the Re - Options Thread:
Quote:
..........give thought to the following scenario.
If you do what I'm contemplating - as per the previous para. - and presume I own 400,000 Oppies at an av. Cost of today's 3.8c close = $15,200.
Ignoring brokerage both ways, if I sell them in a few days when the Oppies reach say 4.2c (=$16,800 proceeds) and the shares are still buyable @ 6.0, after a short-term dump that doesn't happen to the "better-bet" Oppies - then I could acquire 280,000 shares with that $16,800.
Given that the Oppies still have ~9 months to go to Expiry Date, and whatever news is released within the next 4- 6 weeks DOES move, substantially Northward as expected, the SP of BOTH the shares & CORRESPONDINGLY the Oppies (i.e. the price differential - for even a considerable # of months from now - will remain ~2c (between the heads & the Oppies).
It is (therefore) simply mathematically logical that you'll make far greater capital gain - once news of even just good flow rates Is released....................
End quote
In your case now, if e.g. you've got $16,800 to spend, you could
- buy 420,000 Oppies @ 4c
- compared to 280,000 shares @ 6c, i.e. at the currently trending price differential of 2c.
So if the shares' SP rises to 8c say - in the short term - your gain, if holding 280,000 shares, will be : $5,600.
If that move does in fact happen its London to a brick the Oppies will rise by the same amount, and your then gain, if holding 420,000 Oppies will be $8,400, or 50% more than if you bought the shares!
I realise that to a considerable degree the latter would be the common sense approach to many posters, but then I suspect there's a lot of posters that are no good at maths at all, and would appreciate this explanation. Trust that helps. GT.
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