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Orson

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18/11/15

20:26

Post #: 16427017
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Originally posted by samjp2 ↑

So Karma07 - there are several ways you can utilise your rights.

1. You can accept your entitlement and buy the shares at 3.85 - in which case your rights have been used and have no further value. You lock in a stock price, which is hopefully lower than market price.

2. You sell your rights on market, and buy stock on market. At the moment, the stock is 4.30 and rights are 0.485. So your price would be 4.30 - 0.485 = 3.815. With transaction costs, that is probably close to the same as just letting your rights expire, and subscribing, as per option 1 above.

3. If the stock dips lower, then the rights will have some time value. When rights are deep in the money (like now), they have mainly intrinsic value - as in 4.30-3.85 should be about the value of the rights. When the rights are out of the money or just in the money, then they have extrinsic value (time value). So if the rights have a week to expiry, and the stock is trading at 3.95, the options will have 0.10 intrinsic value, and some time value.

This was seen last week when the stock dipped to 3.85 - the rights were still trading at 0.30. Looking at that it priced the rights as 0.10 intrinsic value, and 0.20 extrinsic (time) value.

Best way to trade these, if you intend to buy more shares anyway is to buy stock near the offer price 3.85, and sell your rights - or keep them a while longer to see if they go up (if you prefer)

This way you get your stock, at or close to the offer price of 3.85, and offset some of the cost by selling your rights. In this instance you would buy them at 3.90, less the 0.30 rights price, so your net buying price would be 3.9-.3 = 3.60.

Hope that helps.

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Very useful. Thanks.

STO Price at posting: $4.41 Sentiment: Hold Disclosure: Held
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(20min delay)
Last $6.79		Change -0.040(0.59%)		Mkt cap ! $22.05B

Open	High	Low	Value	Volume
$6.85	$6.86	$6.77	$34.30M	5.047M

Buyers (Bids)

No.	Vol.	Price($)
2	16991	$6.79

Sellers (Offers)

Price($)	Vol.	No.
$6.80	60994	2

View Market Depth

No.	Vol.	Price($)
1	3500	6.790
12	90535	6.780
14	74059	6.770
14	91987	6.760
31	78851	6.750

Price($)	Vol.	No.
6.800	60994	2
6.810	69134	4
6.820	39776	3
6.830	981	1
6.840	1450	1

Last trade - 16.10pm 05/11/2024 (20 minute delay)

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STOR, page-39

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STOR, page-39

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