Merger of Orocobre Limited and Galaxy Resources

Martin Perez de Solay will continue in the role of Managing Director and CEO.

ASX share price for Galaxy Resources (ASX:GXY), IGO (ASX:IGO), Orocobre (ASX:ORE) and Pilbara Minerals (ASX:PLS)

1. The merged company will have a strong balance sheet with cash of $US487m making it well positioned to develop its world-class lithium projects with a production capacity of 40,000 tonnes per year.
2. This is because there are fewer days left for the underlying price to potentially move, so delta changes happen faster per unit of price change.
3. Please log in to your account or sign up in order to add this asset to your watchlist.

Plans to sell a stake in Galaxy’s Sal de Vida project have been iced on signs the company can pay its own way – for now. The $4 billion merger between Orocobre and Galaxy is about building scale ahead of a lithium supply deficit. Battery minerals producers are being ‘priced like internet companies’ says gold veteran Jake Klein. The biggest lithium merger of this year has won support from Glass Lewis ahead of a shareholder vote later this month. Orocobre has its Olaroz and Cauchari lithium carbonate projects also in Argentina, and the Naraha lithium-ion hydroxide conversion facility in Japan for 10,000 tonnes per year. Galaxy Resources recently completed a feasibility study for its Sal de Vida lithium carbonate project in Argentina, and operates the Mt Cattlin spodumene concentrate project in WA.

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A high positive Vanna can magnify volatility expansion on upside price swings, and a high negative Vanna can expand volatility on downside swings. This property makes Vanna a second derivative of price since it measures the rate of change of delta. A long or positive gamma position typically occurs when a trader owns the options, either calls or puts. Galaxy Resources Limited engages in the production of lithium concentrate and exploration of minerals in Australia, Canada, and Argentina. Its flagship project is the Sal de Vida project located in Catamarca province, Argentina.

Merger of Orocobre Limited and Galaxy Resources Implemented

It was listed on the Australian Securities Exchange until it merged with fellow lithium producer Orocobre in August 2021 to form Allkem. These two second-order Greeks are only really important on a conceptual level unless you plan on trading gamma or want to get into algorithmic trading. When many options are clustered around a particular strike price, it creates concentrated pockets of gamma risk. Traders can use this analysis to anticipate that a move up may accelerate as dealers become shorter gamma and need to hedge their positions by buying more of the underlying. However, various paid tools exist that will automatically track the GEX positioning.

The Barchart Technical Opinion rating is a 100% Buy with a Strengthening short term outlook on maintaining the current direction. An application has been made to remove Galaxy from the official list of ASX, which is expected to take effect on and from Thursday, 26 August 2021. “I would especially like to thank John Gibson who has been a member of the Board for more than 11 years and has overseen the extraordinary achievements of the company,” Mr Hubbard said. Orocobre Deputy Chairman Rob Hubbard said that he welcomed Mr Rowley, Ms Heredia, Mr Turner and Mr Fitzpatrick to the Orocobre Board and looked forward to working with them. He also said, “that each of the retiring directors has made unique and valuable contributions throughout the Orocobre journey that has led to today’s merger. Rob Hubbard will continue as the Deputy Chairman and Richard Seville, Fernando Oris de Roa and Leanne Heywood will continue in their current roles as Non-Executive Directors.

Orocobre Limited completed the acquisition of Galaxy Resources Limited in a merger of equals transaction.

The merged company will have a strong balance sheet with cash of $US487m making it well positioned to develop its world-class lithium projects with a production capacity of 40,000 tonnes per year. As options approach expiration, gamma exposure can change dramatically and affect pricing and volatility noticeably. Data limitations – Retail traders do not have a complete picture of gamma positioning from all market participants. While gamma exposure can provide useful signals, like every tool, there are some potential Drawbacks. It provides insights into how much volatility the options market can absorb from price changes. GEX or Gamma exposure, is a critical concept in the world of options trading, holding the key to understanding how market participants react to price movements.

Analyzing the shape of the gamma exposure across strikes allows traders to estimate where gamma may flip from positive to negative. This can give traders an estimation of the net gamma positioning of the overall options market. GEX looks to quantify the rate of change in delta exposure across all options for a particular asset.

Orocobre’s and Galaxy Resources’ boards have agreed to the merger through a Galaxy Scheme of Arrangement subject to no competing proposal appearing for the company. The new company is expected to be included in the ASX 200 index and approaches the market value threshold for inclusion in the ASX 100 index. Overall, Gamma Exposure is a piece of vital trading information that traders should consider adding to their trading routine. As it becomes more mainstream, the quantity and quality of the available tools will continue to increase, but this is a double-edged sword because it also means the edge it provides will continue to erode. While Gamma/GEX is not a standalone system, the information it can provide can save a trader from entering or exiting at potentially poor values.

Solay is to oversee the integration process for the new merged company and with its board, determine an optimal management team that draws from employees of both companies. “Both Orocobre and Galaxy shareholders will benefit from the diversification, growth and scale of a top five global lithium chemicals company,” define underemployment class 10 he said. This “gamma ramp” effect causes rapid changes in the delta and increases sensitivity to the underlying price as expiration nears. One of the events that may help keep gamma as a relevant trading tool, at least in the short term, is the addition of Weekly and Daily options on more and more instruments.

All formed stable triple-helices, with their melting temperature depending on the identity of the guest triplet. The new company will have an industry-leading growth profile and an enhanced financial position to optimise and accelerate development of its lithium assets. Monitoring the gamma positioning and flip point can give key insights into potential future volatility. The new board of the merged company will have four independent directors from Orocobre and four from Galaxy Resources and Orocobre’s current chief executive. The merger will unlock significant synergies for the merged company, create a diversified production base, and realise significant value for shareholders, said the companies.

It helps gauge whether a swift move in either direction could overwhelm the options market-making capacity. Please log in to your account or sign up in order to add this asset to your watchlist. Company information displayed on The Australian Financial Review is sourced from Morningstar and ASX and is subject to their terms https://www.1investing.in/ and conditions as set out in our Terms of Use. The Australian Financial Review does not accept any responsibility for the accuracy and/or completeness of such data or information. Although many investors might be priced out of investing in stocks such as Tesla, there are other ways to get a piece of the EV action.

Charged with merging lithium producers Orocobre and Galaxy Resources into a unified company, Allkem’s Martin Perez De Solay has plenty of experience managing a growing family. Argentinian lithium is the focus of a $US10.6 billion merger between Allkem and Livent. IGO Limited confirmed production at Greenbushes was likely to be “marginally reduced” because the mine’s owners had ordered less volume than expected.

The 292,598,572 newly issued Orocobre shares are expected to commence trading on ASX on a normal settlement basis from Thursday, 26 August 2021. “The merged entity’s growth opportunities in both brine and hard rock position it uniquely to take advantage of expected rising EV demand for lithium,” said Rowley. Galaxy Resources chief executive, Simon Hay, steps into a new role with the merged company as president of international business reporting to the chief executive.