Based on the article posted earlier, OWG – Making Profits on Warrant

The Profit and Loss Summary are as follows.

Summary of Collection

Previously done with the trade on CCK and again, we proved that this could work out pretty well for OWG.

Indeed, due to the nature of newly listed company warrants that are priced at extremely high premiums to the mother shares, I could leverage on companies who are distributing free warrants for a slight gain when warrants go live on the market.

Bear in mind that our profits got buffed up by a bit with some trading when the market goes haywire seeing gains of 5% in a day. But knowing that in the end, the warrants would be the ultimate goal, I shouldn’t fear on trading the share around as well.

I felt that the trick for this is still going back to basics of buying cheap and selling it if it gets too expensive. The sell call at 1.05 was triggered by low volume and fast price rising which experience tells me that the price is unsustainable. Furthermore, it’s merely only a day since we bought and I decided to sell half of it.

You might ask if we are so confident, why not buy more?

The truth is at times, I look at company fundamentals as well. OWG isn’t trading at one of the best PE ratios against anyone in the same leisure business. In fact, business isn’t that great at the current moment.

If fundamentals were a little bit better than what it should be, then it is likely that we see a higher allocation altogether. Anyway, we will still be in the lookout for trades like this and hopingly we could bring you some of them.