agm update, page-24

Hi gummy

Heres one to put in your fav's list. Scored it from bluesdog, its a cracker.

http://www.afrsmartinvestor.com.au/tools/tables/Terms_of_exercise.pdf

Basically they are just a tool that company's use to raise capital instead of a placement. They come with a excise price and and a expiry date.
Just say you brought options in company A that expiry on 31/12/08. The excise price of those options is .30c and company A had a current share price of .10c. This would mean that the option are basically worthless because it would cost you 3 times the amount to convert those options into heads than it would be to buy the heads in the market.
Company B also has option in the market but with a excise price of .10c and there current share price is .30c. These option would likely get converted because what you would pay for one head on the market you could convert 3 options into heads.
You also need to do the sums when buying options
Company C has a option that has a excises of .10c and the current share price is .17c. That means that fair value for that option is .07c.
Options can also be a excellent trade as sometimes the option do lag behind the heads when the share price runs. So when i am trading i sometimes setup watch lists on options only, looking for lagging ops.

Also the term fully diluted market cap means that all the options have been converted in a valuation. Undiluted market cap means that you haven't incorporated the options or don't believe that they will be converted in your valuation.

Anyway hope that helps and if i have missed something maybe someone could add to this post

Cheers