RE: RE: CRJ Insider Buying Details Ah bonjovi - Please don't equate my buying of shares before the CRK tender offer with your short-term scalping of pennies from day trading. There is a WORLD of difference. That difference is RISK!
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As I pointed out at the time, buying CRK at 55 to 60-cents when there was a tender offer on the table for 62-cents was a LOW RISK trade! You had a buyer willing to soak up 80% of the float. So the profit was nearly fixed and nearly guaranteed. Oh sure, there is always some level of risk the transaction wouldn't go through, but that risk was EXTREMELY low. When one finds such a trade, you make up for the small differential by going with BIG size. The CRK Tender Offer was such a low risk trade, it was nearly "free money." The Hedge Fund guys knew this and that is what put a floor under the share price and guaranteed success - all while retail shareholders were frustrated, whining, and selling.
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However, buying shares of CRJ on the open market at 62-cents and then flipping them later in the day or the next day for a scalp is a higher risk proposition. There is no guarantee that prices are headed higher, no BIG Buyer offering to pay a higher price for the shares and as such one could easily see the price fall back down and the trade turn into a loser. Therefore, one is speculating on a rising share price NOT buying into a firm fixed offer.
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So please understand the difference as it relates to risk! And risk management is key to long-term success in the markets.
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