For those who are/were interested, AGK had a 1 for 5 entitlement offer at $11 per share. Closed yesterday so the ability for a little arbitrage trading has been missed by some.
How does one go about this kind of arbitrage trading?
Pretty simple. The announcement of the 1 for 5 was for those who held shares at 25 August. So if you held, say 2,000 shares on that date, you would be entitled to 400 shares @ $11 per share. Sell 400 shares on market at about $14.30 and take up the entitlement offer at $11.00: excluding brokerage you pocket $1,320 ($5220-$4400.)
PS: There would be CGT involved but, in my case, I have been carrying forward a number of capital losses so that wasn't an issue for me. Wasn't concerned about the number of AGK shares I held overall as it is not a large part of my holdings.
Well that may be but you have to bear in mind, I am a simple soul and detest complications. It is why I followed the adage of "Learning from one's mistakes" and ceased attempting to trade many moons ago.
But in this issue the price difference rarely strayed beyond 2c so there wasn't much to be had.
It was also a rare opp where AGK borrow rates were much lower than the cash rate.
You'd make more from cash component (S AGK, B AGKR) sitting in your account than the 1-3c arb itself!
It was also a rare opp where AGK borrow rates were much lower than the cash rate.
You'd make more from cash component (S AGK, B AGKR) sitting in your account than the 1-3c arb itself!
Hmm, an even simpler soul am II hold AGK and didn't know where the AGKR even came from! Let alone, why they mysteriously disappeared a coupla days back, all without me doing anything...
Were they (the AGKR) created, and then subtracted when I didn't take up some kind of offer? Or were they partially converted from the AGK shares, and then sold without my involvement? If the latter, why didn't the settlement appear in my Comsec CDIA account? I know, I know, I should be able to tell by looking at any sudden drop that that happened with the AGK standard shares, but then again, there have been a few of those recently right? The candlestick experts at Comsec say it's a hot sell ATM, BTW.... what say the gurus here?
SYDNEY--AGL Energy Ltd. (AGL.AU) suspended the early stages of a controversial
coal-seam-gas project in Australia's New South Wales state after it detected
potentially toxic chemicals in surrounding ground water.
State lawmakers last year allowed AGL to conduct so-called fracking activities at four
test wells ahead of the planned commencement of its Gloucester gas project about 100
kilometers north of Newcastle.
On Tuesday, AGL said it would suspend the project pending a review of water samples.
AGL one of the better looking large cap 4 shorts in market atm , gravity is about to take hold imo . CPU on the list as well , will load some charts tommorow
Maybe the share buyback might be an issue for a while , i reckon its the main reason for the runup tbh , it held TLS up for a longtime as well previously . The 2 you mention look similar as well .Doesn't look too bad. I also have TWE and ALL in the same vein.
Maybe the share buyback might be an issue for a while , i reckon its the main reason for the runup tbh
That the wholesale price of electricity has almost tripled would likely be a factor as well.
You can't buy shares in Snowy Hydro, Hydro Tas or Energy Australia since they're not listed companies (SH and HT being government owned, EA being foreign owned) whilst the likes of Origin whilst listed are heavily exposed to gas prices (and Origin is short on its own generating capacity too). So of what's left AGL has been the "obvious" share to buy for those aware of the electricity price situation and seeking to profit from that.
I'm just commenting on some fundamentals there and will leave others who know more about charts to look at that aspect. Agreed that it has run up hard and looks ripe for a correction.
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