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Playing & Trading Strategy

I assume you are talking post adjust and pre delist player behavior...

Posted by: PVL Admin (a.k.a Rocket123) on Jul 28, 11:58 in response to JPS13's post Why will a major/wide release drop >20% within 2-4wks...

There is only so much money in any given portfolio.  Some billionaires have the latitude to hold on to stocks after initial OW, but most players don't have that long term capability.  So when a stock adjusts for OW, they get out and look for the next oportunity.

Secondly, stocks typically adjust at 2.7 x OW.  Not all genres have a history of being able to make that kind of multiplier.  Horror, for example is usually a 2.0 multiple or so.  So, it is usually a sure bet to short a horror after adjust, because there is money to be made.  Having said that, there will always be exceptions...Conjuring, for example.

Third, there are ways to estimate the delist price.  Some players use thismto assist them with how they play. WOLV2, for example, just made 55 mil OW for an adjust of 148 mil @ 2.7 multiplier.  What are the chances that it will make that much?  The original movie made a ~2.2 multiplier, had a 69% second weekend drop and was front end loaded.  it made 85 Mil OW.  

Mostly, because players have a hard time with week 2 and 3, and get out until they can see what a movie will make by delist.  Some buy back in each weekend as the movie earns more than expected, THEAT.  If word of mouth is good, Cinima score is high, and weekend holds are strong, etc... You have a good indication to the possibility that a movie has "legs".  Players see this and buy back in because of the perceived gain potential.

All of these factors, and more, combine and conspire to cause movies to drop after OW adjust, and why some seem to rebound by their delist date.





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