Jump to content

THX


ShareCafe

Recommended Posts

  • Replies 664
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

Posted Images

In reply to: robertjb on Friday 20/04/07 04:26pm

yep i know about leverage mate. liquidity is king when you are swinging a big line though.

 

i would take the ords anyday thanks.

 

crookers which post were you referring to?

Link to comment
Share on other sites

In reply to: Jay on Friday 20/04/07 12:53pm

Jay, you're right - steer clear of options - it's like meddling with spiritualism and other dark forces!

 

Buffett supports you too - he had no time for them either.

 

Now for a bit of evil talk. If you believe in THX as a quality long -term investment grade stock then here are some things to consider about its evil child, THXO:

 

1. it exercises at 19c. it last traded at 31c. That means if you add 19c to 31c that means the fully paid should be trading at 50c. But it's not - it's priced incorrectly. it's trading at 52.5c - 5% higher than it should be. Crazy! people are paying 52.5c when they should only be paying 50c.

 

2. Options are evil because they don't live forever - unlike fully paids. For example, THXO only lives until June 2009. That is only 26 months away until it dies. (I am almost certain I have never held a share 26 months but that's because I've got a problem with over-trading!).

 

3. I am a cheapskate - I always have been and always will be. I would rather buy 70% more shares in the form of options (which are shares on lay-by) than pay the full price today and get fully paids.

 

4. But I know i miss out of good things like dividends and rights issues if I hold options. Luckily THX won't be paying dividends for a long time to come, and guess what? I can pay up my 19c per share and turn my lay-by share into a proper share whenever i want !

 

You just send in the form and the cheque and it happens magically in just a few days.

 

5. The downside of options is the bad news announcement -like THX announcing that the latest driling results have discovered that no nickel or platinum or uranium sniffs exist afterall. Those announcements are horrible enough for holders of teh fully paids but they're really horrible for option holders. Let's hope THX doesn't make too many of those announcements.

 

I've made a small fortune ( or a large fortune even) buying options instead of and as well as the fully paids. I've done it for tox and klm and ezl and slacd. the leverage is incredible if you can just manage to pick the right story - that is, the one that doesn't bring out the death-sentence announcements. And it's even more incredible when you can buy the options at a discount to their true value.

 

I'm not saying THX is an investment-grade stock so I certainly wouldn't sell the house and put all the money into THXO -it's too risky. but you're right - it does have a promising chart and a good story and maybe the new MD will reconsider that it would be smart after all to spin off the uranium interests.

 

Thanks for reminding me about options again. I'm off to find myself a low-priced investment-grade option selling at a discount price.

 

Cheers Anne

Link to comment
Share on other sites

QUOTE (anne @ Friday 20/04/07 07:20pm)

I don't think the strategy will change too much Anne with Phil still overseeing as the chair.

 

If you're looking for some good oppies, try ROYOA (be it not 'investment grade'), same management as THX. In fact Phil recently took over as chair from his younger brother, PDN chairman Rick. Brian's onboard there too. And we're talking July 09. You won't buy them for the same price I did, but plenty of upside yet.

 

Cheers

 

PS sorry for shamelessly plugging ROY on the THX thread, but a) ROY was a THX spin-off, so they're family; and b) I've been plugging THX before most of you had even heard of it. http://www.sharescene.com/html/emoticons/stun.gif

Link to comment
Share on other sites

In reply to: anne on Friday 20/04/07 07:20pm

Well said! Great to read another believer's thoughts. I often wonder at the lack of mathematical nous evidenced by those who dabble in the arcane arts of buying and selling shares in preference to options. As Archimedes was supposed to have remarked, "Give me some leverage and I will move the world!!" http://www.sharescene.com/html/emoticons/ph34r.gif

Link to comment
Share on other sites

In reply to: anne on Friday 20/04/07 01:49pm

Rediculous I certainly wouldnt be putting a bid in a 50c unless I was keen on getting some shares. As for the options are you implying that the excise price of options puts an upper limit on the share price. Rediculous again . Give me a break

 

Have a good weekend.

Link to comment
Share on other sites

In reply to: anne on Friday 20/04/07 07:20pm

Anne

 

I have been trading/writing exchange traded options successfully for nearly 10 years, so know exactly how stock options work, thanks for the education though....

 

Yes i know that sometimes they trade at intrinsic or even less then intrinsic value yet some trade with exorbident time value built in(compared to an ETO). compare VREO and THXO, go figure. i have never been able to fathom it, especially when the volatility of a few shares seems to be about the same. thats the price you pay for liquidity i'm afraid. when you are swinging a line of a mill or more shares i dont really see the point of trading stock options on speccy stocks. if you can afford it just go for the ords and the liquidity and no lag on the price. ETO's are fine because of market makers and they dont lag and are priced to an exact formula. Of course as you say you can exercise early, but that is a week or two long process, and we all know what can happen in a week or two. exercise risk can be nasty. trading is all about risk and the more risk you can take out of the game the better in my opinion.

 

Stock options are a poor mans game imo.

 

But hey, do what suits your style.

 

Cheers

 

Jay

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×
×
  • Create New...