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Northen_munky

9,724 Posts.

1406

07/06/17

23:17

Post #: 25161114
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Originally posted by The Guatemalan ↑

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.

Expand

Oppies are all about leverage ..short and simple ..But good Post G for the uninitiated..

Laters..

88E Price at posting: 5.9¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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Last 0.3¢		Change -0.001(16.7%)		Mkt cap ! $72.23M

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