Hi, Paul.

PE> I've painted myself into a corner here.  The short story is
PE> that all the trading done under Xiayi's name has made a
PE> profit of $2500.  Unfortunately, although I have huge capital
PE> losses ($9,000 just in PDP), Xiayi doesn't have any.  I am
PE> thus looking for a long-shot, e.g. PLP options at $2.50 to
PE> expire this month, so that either she pisses the lot off or
PE> makes a huge profit, which was simply meant to be.

Could be a bit rash, after all a profit is a profit is a profit, even if
the tax man gets nearly half of it (which galls).

PE> What would you recommend?  I'm after a 10-20% chance of making
PE> 10-5 times my money, or 90-80% chance of losing the lot.

But if you're determined I guess I'd have to say exchange-traded options
in a gold stock, probably Newcrest (NCM). Gold dropped a couple of bucks
last night and has at least a reasonable chance of coming back up. Of
course that might already have happened by the time you can act, like
tonight. :-(

I don't think any shares, or 'company' options, have the chance of doing
that in the sort of time frame you're talking about.

PE> IDEALLY what I would like is a share such that it will either
PE> have a massive increase, which I DON'T need to sell (I have to
PE> sell the options if they expire this month), or a massive
PE> decrease, which I can sell this month (to PE).

The first scenario doesn't really help you (Xiayi) though, does it. The
timing may also be wrong, because lots of other people are doing the
same thing before June 30th.

PE> Got something that fits that bill?  What I'm after is the
PE> world's most volatile stock.  To be sold to PE when it makes
PE> $2500 loss, or to be kept for years (or until I have another
PE> capital loss to write it off against) if it makes a huge gain.

There are other possibilities, the more traditional tax-loss
arrangements. For example I could sell you some genetically
engineered trees which would get Xiayi a tax loss of hmmm, there's a
couple of possibilities, the best one for you is probably ~$11k, the
other is about $23k. I don't have the numbers with me but in the best
arrangement which was in front of us at the presentation it would cost
you $562 from memory. Of course you'd need to run the details past your
own tax advisor (mother?) to be sure it fitted your circumstances. And
you have the chance of making some real capital gains in the future.

Or she could take out another one of these share loans, Citibank for
example now have arrangements where you can borrow 100% of certain
stocks, capital guaranteed. That means that, if your stocks go down you
simply walk away, they keep the shares. If they go up, you get the
benefit. The idea is that you pre-pay (up to 13 months) interest which
you can claim as a tax deduction in this year. Dividend payments in
future years of course are assessable income. And the option is on a
per-stock basis, so if say WBC loses you $2k you walk away from that,
but keep the profit on NAB which happened to go up.

I have doco on both these if you're interested (the first is a
prospectus), but you'll have to move reasonably fast.

I don't know about the world's most volatile stock, but historically
Australia's has been Newscorp (NCP). You could always look at say July
or August options in NCP and maybe one or two others, at least one
strike price interval out of the money. If 1/2/3 are down at the end of
June X sells it/them to P before the 30th (I think that would have to be
done on the market, so $50 both sides). Sell the other(s) on the market
on July 1st to get a realised profit - in the next year.

You should also consider that you may be allowed to value any stock
you/Xiayi are holding on June 30th at the lower of cost or market but I
think that doesn't help, I think you're talking about realised gains.

Once again, do not act on ANY of the above without discussing it with a
taxation professional - this is NOT advice, it's possibilities for you
to consider/investigate.

PE> I thought buying my remaining quota of PRM at 3.3c was a good
PE> idea.  I sold it for 3.9c a week later.  :-/  I think I need
PE> to piss harder and faster.

Nice one! :-)

PE> Anyway, better send me out the option forms for Xiayi and while
PE> you're at it, anything else that I need to sign so that we don't
PE> need to go through all the signing yet again, later.  I found

In today's mail to you is 2 sets of CHESS sponsorship agreements,
authorities to transfer any existing CHESS holdings from SHAW to
Camerons, and option trading client agreements.

PE> out that another thing you have to sign is something to authorize
PE> payment to an account that doesn't have your name in it!

Yeah, that's true. It's to prevent (or minimise, anyway) fraud - we will
only pay the proceeds of a sale to the person named on the certificate
or the person in whose name they're held in CHESS. That CAN be in the
form of a permanent authority I would think, but is more usually on a
per-event basis.

Can be a pain in the arse sometimes but overall the protection for the
shareholder is probably worth it.

Regards, fIM.

 * * Reality is for people who can't handle Star Trek.
@EOT:

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