John, re BFLY/W (former PVTR/W):
To: John G (574 )
From: Christian1310 Thursday, Nov 19 1998 4:56PM ET
Reply # of 579
John re BFLY/W former Pivot Rules:
Pivot Rules '02 PVTRW OTC 0.813/ 0.844 1.500M 725810113
Underlying Securities: PVTR OTC 3.750/ 3.844 2.700M Stock
On Exercise: Current -05/15/02 send: 5.000 US$ to receive: 1.000 PVTR
Call Terms: Current -05/15/02 Callable for 0.01 US$ if PVTR CLast 165.00% for 20/30 bdays
(http://www.noddings.com/ww.html)
So if it closes over 8.25 for 20 days out of a 30 day window it's callable, that seems to be the aim here. Ah, I see. (should have bought some warrants when they were at 0.82) <g>
C.
Secondly I have read thru thw recent filings to ensure that the terms have not been changed.
I shorted initially at 12+, 11, 10+ and 10. Shorts close to 9 are a bit meager but the chance to short at 9 was not really high..
When it was beyond 10 I bought BFLYW but not a whole position - just to hedge a part of the short to avoid a blowout. Note that they trade at -NO- premium or time value. Sure they are deep in the money, so there should be little premium, as they run until 2001. The rest of the position is "insured" by a high stop loss ($3 above).
So, there's no need to cover the shares once shorted (I don't know if I could find them again) and recently when it was 9 where it is held with blocks at the bid, I buy more Warrants and when it reaches 10 I sell the warrants again.
It is slow now, on average I'm 2 and commission dollars ahead.
Daycount: day 3 to close over 8.25, needs 17 trading days from now if there are no 8.25-target "misses".
Endings: I think I will sell the warrant near the end of period as they may devalue if the are officially called - in the light of the imminent dilution. I did not short the warrant, although it earned a higher percentage than the stock and it was possible.
If the warrant was not called (which I rule out at present markets), then bfly should fall more or less. The warrant develops some time value, when approaching the strike. So it has value when the underlying (stock - strike) has none, improving the odds.
C. |
