Infostream, Dee-bar, others,
Yesterday (Monday, Day #2), I was able to play Corel's decline successfully (and FWIW, I am the self-declared world's worst trader!).
It (COR.TO) opened at Friday's close, $4.50 (note: figures in $C), which turned out to be nearly the high of the day ($4.70 was the high). The pre-opening action indicated a higher price, around $5 (at 8:40am), however as the open approached the indication sagged, and more quickly in the last ten minutes prior to the open.
Volume was 1.1M shares, which is quite heavy for COR in Toronto. The price more or less declined throughout the day, and there was some rapid declining in the last 30 minutes (from about $4.10 to about $3.75), with heavy (but not extraordinarily spectacular) volume.
I don't completely buy Dee-bar's scenario #reply-13785894 (my disagreement: I see no reason for a gap up to happen --- all I see is a tendency for heavier than usual volume, heavier than usual selling pressure, and a tendency for the close to be near the low of the day), however so far it seems to be working.
FWIW, I increased my short by 45% at $4.60 at the opening, and then covered 65% of my short at the close at $C3.75. I don't daytrade (this was my third-ever daytrade), but this was a successful one, and I lamented to my broker that successful trades like this are likely to be the gods' way of sucking you in...
It will be interesting to see the action today, when COR.TO and CORL are both trading. Perhaps the price will snap up (shorts covering, hopeful longs buying a "bargain"), or perhaps it will collapse (longs panicking) -- I honestly dunno. If the price is firm or higher, I will likely re-enter a short position.
Infostream, re #reply-13791168 and #reply-13793877 - I don't know if Cannacord will (or ought to) attempt to hedge all of their position down here. If they do, they'll smash the share price, but they will make their 10% (or so). As you note, if they only hedge some, they do have they upside.
Perhaps that is what the second tranche of $C7.5M and third tranche of $C7.5M are for -- they are essentially *free* call options that have been granted to Cannacord as part of the deal (they will be "struck" at the same price as the primary $C15M tranche is placed). As a side note, it amazes me how people seem to underestimate the value of options -- Cannacord was given a free call option to buy about 2 million shares of Corel stock, which will be 10% in the money from the get-go. Go price that out in the market and you'll see just how much Cannacord is being paid for this $C15M. Cannacord could short the full $C15M, make a guaranteed 10%, and yet also be able to benefit 100% (actually, 111% is more accurate ;-) from any price appreciation after Wednesday (they just exercise their $C7.5M option).
Infostream, are you saying that you are considering a long position at C$2?
American Spirit, FYI #reply-13795184
A warning to shorts. Last week was the bottom. We rally sharply from here. EOM.
Last week was not the bottom, Corel closed down another 17% at $C3.75 in Toronto yesterday. As to where we go from here, well, who knows? That's what keeps it interesting... ;-)
Best regards to all,
- Daniel |
