AVZO Current price, page-54

the exercise price is 3c. As time progresses and we move closer to May 2020 when the options expire the price difference will move closer to exactly 3c gap between heads (AVZ) and options (AVZO). Note this is only the case if an option is above its strike price. If it's below it will begin to trade closer to 0

Usually, an option will trade at a premium to heads.
When we say 'premium' that means is usually if AVZ was trading at 6c i would expect the options trading at 4c. this is a 1c premium as AVZO 4c plus exercise 3c = 7c.

On face value the options seem poor value which is true, If AVZ continue to trade at 6c all the way up to the expiration date the options would decrease in value towards the 3c mark. reason being 3c +3c exercise cost = 6c.

However, the premium is there as they provide better leverage. For example.
A few months ago avz traded at 4c the options were at 2c.
The share price went to 9.6c and the options i think peaked at 6.5c (they would have traded higher if the spike to 9.6c wasn't so short)

If you held all AVZ you made just over double your cash.
If you held all AVZO you made over triple

This of course works the same in the opposite direction.


Longish story short.

if you're looking to buy and sell on a stock you can make more money buying the options and can lose more money.

Specifically with AVZ. If you're looking to buy and convert then at a minimum you'd want AVZ to be above 6c by May 2020. Which would mean AVZO would be worth 3c at that date (or very close to it). If you're looking to trade them, then IMO a S/P of 6/6.5c in the next week or month would mean AVZO should be worth around 3.8-4c.

In an ideal world if AVZ was at 10c, people would get just under doubled their money from today on heads.
AVZO would be worth 7c so again almost triple.