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KamXan

11 Posts.

14/07/17

08:59

Post #: 25860285
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Originally posted by birdchirp ↑

Are you planning to convert your options into shares immediately?

If you were going to hold your options until close to the expiry date and converted then you would pay $40000. The share price at that point may be $0.10 per share with a cost of $100,000 (if you were to purchase then) therefore you would have done well. However if the share price is $0.02 at that time then the same shares would only cost $20,000.00. The cost for you to convert is $40,000 therefore you have an immediate paper loss. Note you would include your original purchase cost of the options when calculating profit/loss.

Please note that most options are traded and not converted. The closer to the expiry date the riskier they can become. There is no obligation to convert options to shares- it is your choice ( generally speaking)
Google is your friend-great info out there if you look for it!

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What happens if you don't exercise the options by the expiry date? Have you lost your initial cost to purchase the options?

TV2 Price at posting: 1.6¢ Sentiment: None Disclosure: Held
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