ggpo penny will drop, page-19

Zia, I wouldn't exactly put it that way, your money is at risk in any company in the market, it's just the degree of risk varies.

Some clarification is required I feel by way of an example

Buy 1mil GGPO at 0.003 today cost $3k
Sell anytime if there are buyers, usually buyers do come in on really good anns where the head SP increases significantly

So they are certainly tradeable

But you won't make the motza unless/until the heads exceed the 9c which then gives a profit to anyone willing to buy the options. At 9c the gain is only 0.007 more than that paid, or a gain of 235%. If heads only reach a max of 9c by Sept. then clearly the heads were not only the least risk but also gave a little more return.

If the heads stagnate then as time marches onwards the options get harder and harder to make a profit and may have to be sold at a loss, and if under the condition where GGP SP can't make it to the ex price + some, then those continuing to hold onto the options until the death knell will lose their dosh.

But where it does get interesting is if the heads really take off and you bought the options at 0.003.


Now if the following happens everyone will be jumping for joy, holders of heads and the oppies:

Heads increase to 6x today's value (0.156 in Aug)

GGP $3k buy then increases by 600% with total of $18k, :>)

Oppies increase along with heads but more so
GGPO $3k buy gives 1mil
Difference between the heads and the oppie buy plus ex price is 0.073
People won't pay the same they want a discount on the oppies so take off the 0.003 discount and make it 0.07 clear value
1mil x 0.07 is $70k, :>) :>) :>) :>) four times happier than with the heads but more risk

Share market is all about the more risk taken, the more potential reward.
Now we have all witnessed the many blue chips where people thought there was little risk and they lost the lot, well the GGPO's are risky but become less so if the heads continue to rise in value.

If the heads spiked up 50% for instance you would be able to sell the oppies for a good profit, IMO of course...

With the blue chips like ABC learning and Babcock & Brown there was not the potential to make anywhere near the return that is possible with GGP/GGPO but they still lost it all anyway.

So to the newbies on the oppies remember it all depends on the heads getting to around 9c before you start to see a return on the oppies, having said that they are still like the heads and are tradeable at any time as long as there are buyers for them.

Also remember that anything can happen in the market which means that not only are the options a risk but so are the heads. Cash is the least risk (debatable), while your money sits in any register it is vunerable, but mostly we are Aussies on HC and we all just love a punt.

DYOR on all the above

Now looking forward
If the Permian Basin is as good as a lot here think it is, everyone here will be a winner

If you are wondering about the oppies, just keep buying the heads and they will eventually tag along.

Even though the POO has been rising it's not reflected by the XEJ of late and hence probably keeping the traders away somewhat from the other oilers, but GGP is a different story as you can see