HOLLYWOOD STOCK EXCHANGE
THE ENTERTAINMENT MARKET
THE ENTERTAINMENT MARKET
What is a .ow derivative and how does it work?
On Wednesdays, as you have seen, 3 derivatives are IPO'd witth the same strike price, the put, the call and the opening weekend.
The .ow was originally used to replace the "gut check" but it really shows the opinion of the HSX community and locks in on the day of release.
If MOVIE.OW opens at 40 and goes up, or down, that reflects the opinion of the community. Use the multiplier (usually 2.7) to get the equivalent value of the MovieStock. So if MOVIE.OW is at 35, the stock should also be at about 94.50. if MOVIE.OW is at 45, the stock should be at 121.50
If YOU think the price of ANY security, including .ow's, is too much, you can short. If you think it is not high enough, you can buy it.
In the case of ICEA4, the strike was 65, the equivalent of 175.50.
Well, the estimate is a lot lower, 46 How did the derivatives do prior to the halt? Players bought the put by a ratio of 10-1. WINNNERS ad the put willl delist on the order of 19 (65-46) Unfortunately the players bought the call in a ratio of 5-1 and many will lose there investments with a smaller percentage cashing out because they shorted.
The greaph of the .OW shows that it went up a little in value and plummeted starting July 7. In the end it halted at 53.45 Even so, those holding long outnumber the shorts by a ratio of 10-7.
All of the longs will lose 7.45 on Monday. (that is in addition to previous losses. Those who held it short will gain 7.45 (plus probably more that already shows in the portfolio since they shorted the .ow)
While it is still a "gut-check" investment, you have to pay attention.
Opening Weekend Deriviatives Jul 15, 14:38
Any .ow derivative gets halted on Fridays @ 10 AM PT for that weekend's movie that is being widely released. Jul 15, 14:55
What is a .ow derivative and how does it work? Jul 15, 19:28
So it's very similar to Call/Put Jul 16, 13:07
At IPO put/call strike price and OW price are identical {nm} Jul 17, 14:17
