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Online Share Trading

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ttrada
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spare name calling :( , im embarrest as is - ive got these SB BIL PP warrents. purchased at 8 now at 3. same kinda thing, tried to find something real cheap, and now im guessing im gonna get burnt, advise any1? Issuer: Standard Bank Underlying share: BHPBILL Exercise Price: ? R140.00 Expiry Date: ? 2 Aug 2007 Type: European Put Conversion Ratio: ? 27 Delta: ? -7.54% Implied Volatility: ? 41.48% Gearing: ? 12.16 Days To Expire: 61 (< 90 days) Weekly time decay (theta): ? -27.0%
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4 REPLIES 4
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Seems you bought a warrant in its second half of its life. A warrant loses alot of value in the ,last third of its life. Hence such a high time decay in value. Personally I steer away from warrants in their last third of their life. As a very rough rule warrants around the 30c mark are safer- BUT this a very rough rule. Sorry I cant help on the underlying share. Have not been following it.
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ttrada : Don't mourn just yet.You have 61 days to go and a 2: 1...in terms of Gearing vs Time-decay.That R140 Strike is not out of reach.I too have one little Trade(SBKDBV) that seems an Orphan.However, the General Market is nicely overbought...EVERYWHERE...and interesting developments are right around the corner.So,here's to both of us...Clink ! over the next 10 sessions.Adios.
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And some cursory Technical Analysis reveals that the 61.8% Fibonacci retracement of current rally resides at the R140 mark(quite possible( with a Support-Hop at R161.The Weekly UpChannel(since May2005) shows clearly ebullient punters squeezing the Overbought Side of said UpChannel by the Close on Friday...The Bottom of this Channel resides at the R133 mark,for an excellent BUY of the uderlying....BILSBP has potential to make a come-back.I'd HOLD for now.No point in selling out, at precisely the wrong moment = Monday morning....
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Tango
Super Contributor
Zarp - get real... do you seriously think that BIL will drop -26% in the next 60 days??? BIL (and all resource shares) are flying. If BIL retraces, it's unlikely to drop below 15600. Also, this warrant has massive decay - every day that goes by it's losing a lot of value.
Ttrada - I can't tell the future, and I can't tell you want to do with your warrants. You need to take responsibilty for the trade. Think about why you bought them (what was the logic behind predicting a fall in BIL), and whether those reasons still make sense. If not, get out with what you can, or the time-decay will take you to zero. My general advice would be to stay away from warrants and stick to trading shares or futures. But if you must buy a warrant, the general rule is you should look for a more expensive one, not a cheaper one. Never buy one trading below 20c, but preferably in the 30c-60c range if you can find one. Make sure you have more than 90 days to expiry. Set a strict stoploss before you enter the trade so you know what your maximum risk is. And use some common-sense - if the trade goes against you, get out with your capital intact and wait for the next opportunity. Take small losses quickly, and let your winner run. Ignore the chatter on this forum that encourages you to hang onto losses and hope for a turnaround. You must preserve your trading capital, and trade the low-risk opportunities if you want to stay in the market. Good luck.
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