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Online Share Trading

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share buying

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Davbon
Occasional Contributor
Why would a director of a company buy an amount of shares at a price and then sell them again at the same price on the same day? This is evident under directors dealings at WEARNE.
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6 REPLIES 6
Maggie
Super Contributor
Very strange, doesn't make sense, will be losing money in brokerage??
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Davbon
Occasional Contributor
Am i reading it wrong?
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barry_1
Super Contributor
i do not have the time to investigate fully,but he is probably exercising options,or something else in that line!
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DST
Super Contributor
Slowly now. Directors often get some of their loot in the form of OPTIONS on their company's ahares. eg a director of PiknPay may get the option to buy 10000 shares at say R20. (Normally he will then have to meet some targets, stay some time etc etc). Then the time comes when he can and does exercise his option - he BUYS the share at the option price, and simultaneously SELLS at the market price - and can pocket the difference. Looks like lots of brokerage, but he has had a upside only exposue to the shareprice, and is cashing in.
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cfm
Super Contributor
Look at the SENS for the transaction and you will notice that he is buying CFDs. Maybe he is swapping his share holding for the equivalent number of CFD contracts.
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Davbon
Occasional Contributor
Can't find anything under SENS, but thanks for the input so far. He must have got the shares at no cost and exercised his sell option. The same transaction was concluded on consecutive days?
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