Hi guys,
Slightly less experienced investor here so please forgive any faux pas. I saw the below article in the AFR yesterday, not sure if you caught it:
Duxton Water to rise with price and Blue Sky
basically the article predicts the D2oo options being in the money toward the end of this month based on D20's marginal out performance of Blue Sky's water fund and, more importantly on the back of an increase in the water price itself. That's pretty much the long and short (sorry Blue Sky) of it.
I decided to check out the D200s as a result today and, unsurprisingly, they were up 100% (from $0.003 to $0.006). However, at the end of the day a minuscule amount changed hands at $0.002 resulting in a drop in price! I would insert a screenshot but I don't know how sorry - if someone lets me know I will do it.
A few questions:
- could a buyer (who also holds shares) sell themselves a small parcel of shares to drop the closing price of the options (i.e. do you think the final trade at $0.002 was a legitimate arms-length trade)?
- do you think it's worth picking up a few of these options at the current prices? I see less than 60,000 shares left on the sell side for D20 and they're ALL at $1.13 or above. At this point it looks like unless you've got a few of these options you'll be waiting a long time and paying the price to get into D20.
- are any of you familiar enough with Black-Scholes to try and value these? Volatility etc is beyond me currently.
I am considering buying a bunch of them at $0.004 and then exercising later in the month once the sell side thins even more and (presumably) heads toward $1.16. Only thing limiting my profit will be the lack of capital I have to actually shell out the $1.10 exercise price!
Let me know your thoughts on the above and please give me any advice on posting here as I am new.
(20min delay)