In March I posted the message at the end of this post. Now that they are selling at 0.1 cents the risk/reward (for me) is such that I've purchased some back. Yes very high risk but also potentially high rewards.
Shares are currently 3.7 cents. A turnaround in the market mood could easily see WHN back into 5 cent territory. And IF there was a very good JV announcement (perhaps in conjunction with some broker drum-beating) then it is possible to imagine that the shares could double from there to 10 cents or so.
In that scenario:
WHNO moves from 0.1 to 2.5 cents (10 cents minus 7.5 cents excise price) which is an increase of 25 fold.
So my 2 k purchase: upside is 50 k (2500%) with downside being losing it all (100%). (And in fact in one sense not a 100% downside as you can carry forward losses indefinitely to offset against capital gains so the loss has value)
Having said all that, it is money I can afford and expect to lose as there is only realistically a pretty small chance (5%??) that the scenario will come to pass. It is not for nothing that WHNO are selling for 0.1 cents.
Just my personal take on the risk reward ratio. Will add a little spice if nothing else to the next six weeks, V
"I've lost plenty on various company options in the past and so sold out of WHNO a couple of weeks ago for 1.4 cents - time is just getting too short.
My own guesstimate is :
Perhaps an 80 or 90% chance they will expire worthless (3 months goes by in a flash, and the last report seemed to be signalling there would be no JV in the near term)
The risk/reward ratio isn't there - for very high risk (short term expiry) you don't get a great reward even if the shares double.
Having said that could just be tempted if they got very very low.
Nobody knows at the end of the day and good luck to option holders"
QFY Price at posting:
3.7¢ Sentiment: Hold Disclosure: Held
