why minemakers is the best phosphate play, page-18

A lot of option holders may be looking as though the options are not worth exercising at current prices.

Say you bought the option at 24c, and an equivalent head at 54c. You intend to sell the head to exercise an option.

At 50c, you incur a loss of 4c on the sale.
You then fund the option with 30c and have 20c remaining.

So you have gained a net 16c for this swap, therefore it is profitable.

However say the price is 45c. Your sale of a head will incur a loss of 9c, and your residual gain is 15c - your profit is now 6c.

At 42c you break even, and IMO the support level during the pre-exercise period. Unless we get a cataclysm of course.