sophisticated investors, page-52

mikey in a perfect world you wouldnt pay 30c for a 28c share.
The price of the share is not static and can move above the 30c price and below again. Not all people will watch the market and buy at that moment it drops below 30c.
lets use the example where you are an end of day trader. The share price is 28c at the end of the day. You need to make your decision to excercize or not that night? do you excercize or take the chance they will be 28c at you next opportunity to buy? what if you chose not to excercize and they open up at 30c or more? then you have lost. a price close to the excercize price will leave some people dammed if they do and dammed if they dont.
You may assume that you would make the perfect decision and you may watch the screen all day and be able to make that call.
Not all players are day traders.

Now if you think it was not a good example then thats fine. i am happy with what i have said and i believe it represents a predicament that many may face.
If you think it was a mistake then you are wrong.
i deliberately used the scenario of a lower share price than the excercize price to illustrate a point.

cheers