The Original Profit-Taker
| The Greatest Game on Earth or "Why should the billionaires have all the fun?"TM The ‘Game' in a nutshell Professor Smarba supplies ‘the team’. The stock market supplies the action. The experience empowers you. __________________________________________________________________________ #1 'LIVE' Choice for August 2010 (First posted on Mon., August 16, 2010 Based on closing prices of Fri., August 13 2010.) UAL Corporation, 4.5% of 2021 'Different convertible plan, Same crew' |
__________________________________________________________________
In a Nutshell
________________________________________________________________________
2010 Orders Filled Profit (Loss)
________________________________________________________________________
August 16
Buy 30 bonds at $1000.00 each
Sell short 306 common shares at $22.81
(Based on our game investment of $15,000 plus an additional conservative 50% margin of
$15,000)
______________________________________________________________________________
THE PROFIT-TAKER GAME PLAN:
UAL Corporation
Common
Stock Price ($)
36.49 Long-term Goal (Uptrend)
33.07 Sub Goal 3 (Uptrend
29.65 Sub Goal 2 (Uptrend)
26.23 Sub Goal 1 (Uptrend)
*22.81 Initial Purchase Price
11.40 Sub Goal (Downtrend)
0 Long-term Goal (Downtrend)
*Underlined blue is price of last 'filled' trade.
Gamers! To verify current price, click here.
-------------------------------------------------------------------------------
Please Note Well:
In the beginning on August 16, 2009...
We bought 30 bonds. CALCULATION: $30,000 ($15,000 of which is margin)divided by
$1000.00 (price of a convertible bond) = 30 bonds.
Total investment = $30,000.00
We start our plan as a one third hedge. That is, we sell short a third of the shares
represented by our 30 bonds which equals a total of 306 shares sold short.
CALCULATION: 30 bonds x 30.64 shares per bond = 919 shares. So a one third hedge is
1/3 of 919 or 306 shares sold short.
Always sell short 153 shares on each move to an upside sub goal. That is, 919 shares
sold short, divided by the 6 sub goals = 153
Always cover ('buy in') 153 shares on each move to a downside goal.
________________________________________________________________________
CONVERTIBLE BOND FACTS:
UAL Corporation, 4.5% of 2021
CONVERTIBLE PRICE : 100.00% or $1000.00
NUMBER OF SHARES: 30.64 shares per bond
CONVERSION VALUE : 69.89% or $698.90.
PREMIUM : 43%
TERM CHANGE: 0
MATURITY: June 30, 2021
EXCHANGE: Over-the-Counter
CURRENT YIELD : 4.5 %
ISSUE SIZE: $ 762 MILLION
INTEREST PAYMENT DATES: December 30 and June 30
CALL PRICE: No call price
CUSIP 902549AH7
INDUSTRY Air Transport
________________________________________________________________________
UNDERLYING COMMON STOCK FACTS:
UAL Corporation
PRICE: $22.81
HI (52 WEEKS): $25.00
LO (52 WEEKS): $5.43
VOLATILITY (%) (52 WEEKS): 86 %
HI (LAST 3 MONTHS): $24.25
LO (LAST 3 MONTHS): $17.70
VOLATILITY (%) (LAST 3 MONTHS): 29%
HI (PREVIOUS 10 DAYS): $23.21
LO (PREVIOUS 10 DAYS): $22.10
VOLATILITY (%) (PREVIOUS 10 DAYS): 5%
EXCHANGE: NASDAQ
MARKET CAPITAL: 1.16 billion
DIVIDEND: NIL
SYMBOL: UAUA
_______________________________________________________________________
NATURE OF BUSINESS
- UAL Corporation (UAL) is a holding company whose principal subsidiary is United
Air Lines,
- United transports people and cargo through its Mainline operations,
Company Official Web Site: UAL Corporation
Suggested 100% Ideal Actual Rating
Is the premium on the bond under 20%? 10% 2%
Of the situations being considered, how does 50% 40%
the volatility of this common stock compare
with the other candidates?
Is the market price of the convertible bond 10% 9%
under $1000 (par value)?
Does the yield (%) paid by the bond, less the 5% 5%
common stock yield, at least offset the interest
paid to your broker for margin privileges?
Does the company pay dividends on the stock? 10% 10%
( The investor must pay declared
dividends on short sales).
Is there a record of convertible premiums? 5% 5%
Does the company have assets in excess of the 5% 5%
face value of the bonds?
Is the company in an industry in which there is 5% 5%
a possibility of growth?
TOTAL: 100% 81%
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |