HSX Forum

Playing & Trading Strategy

Reply Topic List All Forums

ARB and delist

Posted by: JohnTEQP on Aug 27, 21:54 in response to kensanity's post what do you mean by

ARB stands for "arbitrage," and refers to a difference between the price of a security and the known value. For example, there are some blockbuster warrants that will cash out, or "delist" (i.e., be removed from listing on the Exchange) at H$0, because they did not make their strike price. The strike price for Angels and Demons is H$150. If it makes more than $150 million in domestic box office by Labor Day, the Blockbuster Warrant will cash out at the difference between the final total and $150 million. But Angels and Demons has only made $133 million so far, and there is no way it can make $17 million in the next week. So we know that that Blockbuster Warrant, BWAND, will cash out at zero. But the price of the warrant cannot be zero, it has to be at least one cent. Which is what it is (the minimum used to be six cents, so this was more lucrative before version 4 of HSX). So if you short that Blockbuster Warrant, you are guaranteed to make one cent per share. 10,000 shares will cost you $100, and you are guaranteed to make money. If you do it during the commission-free period, you won't pay any commission at all, since you won't pay any commission on the delist, either. There are several blockbuster warrants like that. Indie films nearing the end of their run tend to be excellent arbitrage opportunities, too.

Theoretical Question: you start your account today; what do you do? (specific!) blandestk Aug 26, 15:39

I tend to look for guaranteed (right) shorts and re-short at least weekly commission free. This is a way to build up extra cash. MojaveMeg Aug 26, 16:45

If I started my account today, at 12 noon. I would wait and see what the news holds and invest in those stocks. I would also look at the Catzan Aug 26, 18:11

I'd practice for 6-8 weeks, and reset my port (assuming rookie port). {nm} Chefbobcat Aug 26, 20:53

would i be right to assume kensanity Aug 27, 02:47

depends on how quickly you want to make your money Carlion Aug 27, 07:58

EASY,go buy all Blockbuster Warrants that are ARB there is a post that will tell you exactly what warrant and how much H$ wait for delist! {nm} damenchipguy Aug 27, 18:07

what do you mean by kensanity Aug 27, 18:43

It's all in here, if I can get the linky right... Chefbobcat Aug 27, 19:53

ARB and delist JohnTEQP Aug 27, 21:54

just to confirm kensanity Aug 27, 22:50

NO, go to warrants check out which movie has made more than strike + trade value, BWPRO is an example we are explain brush up on your vocab damenchipguy Aug 28, 09:52