HOLLYWOOD STOCK EXCHANGE
THE ENTERTAINMENT MARKET
THE ENTERTAINMENT MARKET
Most wide releases get 3 derivatives.... MOVIE.CA, MOVIE.PU and MOVIE.OW
.CA (or call) was meant to mimic a real life call option. It is a bet that the movie opening weekend will exceed a certain amount, called the strike price. If the strike is 20 and the opening weekend is 24.2M, the option delists at 4.2 If you bought it for less than 4.2 (IPO was 2) you gained the difference. If the movie opens at less than the strike of 20, it delists at zero. If you bought the IPO at 2, you lose 2 per share.
.PU (or put) was meant to mimic a real life put option. It is a bet that the movie opening weekend will be less than a certain amount, called the strike price. If the strike is 20 and the opening weekend is 15.6, the option delists at 4.4 (20-15.6) If you bought the Put at IPO (2) you made 2.4 per share. If the movie opens at more than the strike of 20, say 24.2, the put deleists at zero.
It is possible to short Puts and Calls, bets that the exceeding the strike (PUT) or failing to exceed the strike (CALL) will happen. Short payouts are the opposite of buy payouts.
.OW or opening weekend is effectively the good old gut check. The value floats based upon market fluctiuation, and at halt time, you are either long or short. You gain or lose based upon the difference betwen the .OW and the actual weekend totals.
Hope that helps.
I'm new here. How do derivatives work? [BRDSM.CA] May 16, 10:50
BRDSM.CA will delist later today... you can't sell it. The good news is it should cash out a bit higher than 24.5 May 16, 11:30
So they do cash out automatically? That's exactly what I needed to know. Thanks! {nm} May 16, 12:08
Well, actually he's talking about BRDSM.CA and not BRDSM.OW. May 16, 13:06
My bad {nm} May 16, 13:58
Most wide releases get 3 derivatives.... MOVIE.CA, MOVIE.PU and MOVIE.OW May 16, 16:38
