The Motley Fool Discussion Boards
Fun & Games / HSX Board Room
|Subject: Glossary||Date: 7/24/2002 10:48 PM|
|Author: redbaron7||Number: 472 of 4152|
These are the shares that correspond to a particular movie.
The moviestock will delist after 4 weeks screening. The delist price will be equal to the total box office takings at the end of these 4 weeks. For limited release movies, the delist is after a longer period (??12 weeks??)
At delist, $1 million in box office receipts translates into H$1 stock price.
If you are holding the stock and you bought at a lower price, then you make a profit - equal to the difference between the purchase price and the delist price (multiplied by the number of stocks).
These are shares that correspond to a particular actor,actress, or director. These bonds represent the average gross of his/her's last 5 films. Bonds involved in a movie, typically adjust the day after the movie delists.
All trades are charged a commission of 1% of the value of the trade.
Eg. if you buy H$100 in stock, $101 will be taken from your cash holdings.
This is when a security is removed from the system.
The security will be removed from your portfolio and replaced by cash calculated by using the delist price.
This can happen for the following reasons:
1.) A Movie has been on full release for 4 weeks.
(Limited Release it is ???12 weeks???)
The delist price represents the total box office takings for the movie during this period. This is a good way to make money - eg. if you buy a stock at H$50 and it delists at H$75, you make H$25 profit
2.) A Fund has reached its delist price. Most funds delist at H$100 - see the fund description for details.
3.) An Option or Warrant has 'expired'. The date of this delisting is quoted in the option or warrant description.
Delist price depends on the option or warrant.
4.) A Movie has gone straight to video or straight to cable.
Delist price is H$0 in such cases (ie. a nice profit if you're holding short).
5.) A Starbond represents a person who doesn't like being listed, and the person has asked to be taken off. Ray Park (Darth Maul) actually asked to be taken off the system!
6.) HSX will occasionally clean things out, removing movie concepts that are stagnant or starbonds with few movies. Such cleanups are usually announced in advance.
All delists are announced on the calendar, although sometimes (eg. straight to video delists) very little notice might be given.
Wide release movies will be frozen (ie. no trades allowed) over their opening weekend. At the end of the weekend they will automatically be adjusted in price.
Typically(*) this new price is 2.9x(opening weekend gross). Except for public holidays, the adjust will occur on Sunday evening, as the stock is un-frozen.
Why 2.9? Well this is a good estimate of the total takings over the first four weeks of release (and hence final delist price). There is some debate as to how accurate this figure is. HSX have changed it in the past, and may well change it in the future.
It is definitely more for some movies than others. Eg. a bad hyped-up movie with bad word-of-mouth will have a high first weekend gross, but a huge drop-off. Hence The adjust will over-estimate the final delist price.
But a good movie which develops good word-of-mouth, and didn't have much of an advertising campaign, will have an adjust which under-estimates the final delist price.
(*)The calculation is different for non-Friday openers, and for weekends with Public Holdays.
Eg. A Thursday-opener, will adjust to (Thursday gross) + 2.9*(Friday,Saturday,Sunday gross).
These represent mutual funds in the real world. They are managed by fellow players. Older funds have different rules, but the newer funds start (IPO) at H$20 and will delist when they reach H$100.
Funds usually have a theme or strategy associated with them - eg. "films associated with the UK", "Disney films", "starbonds adjusts".
Warrants are issued for certain events - eg. the Oscars, Summer Blockbusters. Issue price is low, and the final delist price represents something tangible.
Eg. for the Oscars, it was H$25 for a win, and H$0 for no Oscar.
Or for the Holiday Warrants, each warrant has an associated "Strike" Price. The final delist price is the total holiday box office take minus this Strike Price.
Eg. Movie A makes $400 Million, and the matching warrant has a strike price of $250 Million. Therefore each warrant will delist at #$150.
If the strike price isn't met, the warrant delists at H$0.
Options are similar to warrants. Each full release film will have a Call and a Put Option. These are traded for about a week before release.
Both will have the same strike price.
A Call Option is betting that the first weekend's takings will be MORE than the strike price.
A Put Option is betting that the first weekend's takings will be LESS than the strike price.
Eg. Movies A & B have options with strike prices of $10.
A makes $7 in the first weekend, whilst B makes $16.
So the A Movie Call will delist at H$0
So the A Movie Put will delist at H$3
So the B Movie Call will delist at H$6
So the B Movie Put will delist at H$0
"Initial Public Offering"
This is when a new security (bond,share,fund,option,warrant) is added to the system. Often they are added a day or so before the IPO but you cannot buy them. On the IPO day, you may buy/sell them, but the price is fixed. The price is allowed to move on the day after the IPO date.
This is tradition buying.
You are shorting a stock.
Shorting is like buying, except you're betting the stock will go down.
The movie "You've Got A Message In A Bottle In Seattle" is opening this weekend. Right now the stock price is $75 share, but you don't think it will do that well, and that the price will adjust down after the weekend recalculation (2.9 X the box office). You have $800,000 in cash to invest, so you decide to short 10,000 shares of YGMBS; in other words, you are betting that the price will go down and you want to make money on it. You go to YGMBS. The broker to the left has four buttons and two boxes. The upper box shows the ticker, the bottom box has the word "max". You type 10000 in the lower box, then click on SHORT. The confirmation comes up: "SHORT 10,000 shares of YGMBS?" You click on the confirm button, then go to your portfolio. You will see the ticker YGMBS with a red, italicized 10,000 in front of it, showing that you are shorting the stock.
That weekend, YGMBS makes a total of $10 million. The weekend adjust of 2.9 times the weekend box office takes the price from $75 a share to $29. You have just made a profit of $46 a share, times 10,000. This is when you cover the stock to reap the profits.
Now, later on you learn that YGMBS is going to delist, that is, HSX will remove it from the board and cash out payments. The stock went back up to $100 a share, but the total box office is $75 million. One Hollywood dollar is equal to $1 million in box office receipts, so you know it will delist at $75. Once again, you short the stock. When it delists, you will see a profit of $25 per share, minus commissions.
The equivalent to 'selling' but for a Short stock.
You're shorting YGMBS just before the adjust described above.
You shorted at H$75, and it has adjusted to H$29 with a profit of H$46.
This will show as a total value of H$121 (H$75 + H$46 profit).
You then cover it. Do this by placing your pointer over the YGMBS ticker. The broker on the left shows the ticker and max. Click on Cover.
The confirmation comes up; "COVER (x) shares of YGMBS?" Click on confirm and roll in your newfound virtual cash.
This is when a moviestock has a value less than its current box office takings. By buying, you are guaranteed of making a profit greater than or equal to the current difference.
Holiday Warrants can also enter Arb.
|Copyright 1996-2015 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|