How to Trade a Cap Raise Collated by Freehold Poster: Freehold...

How to Trade a Cap Raise
Collated by Freehold

Poster: Freehold
Date: 28/07/16
Time: Unknown
Post #: Unknown

In my experience of cap raises (reckon I seen 100's maybe more than a 1000 ? ) where there is a significant discount to the prevailing price will see the share price revisit the cap raise price in 1 to 3 weeks afterwards 90% of the time so put in a buy order at or around the cap raise price and be patient... in the other 10% of the time the stock will rally usually if the stock story is super bullish and the market perceives the only thing been holding back a run is the lack of cash... so its a judgement call. Conversely if you own the share and are in profit then the reverse is true... Sell Immediately and Buy back in around the cap raise... although have a buy stop if your wrong and it takes off.