to the ctp gurus, page-4

I don't think that 50% is the way to look at it. I think it's a distance behind. So, say about 3.5c behind the shares.

The value of an option = The value of the head less the cost of to exercise the option, plus a value attributed to the time remaining on the option.

So let's express this as:
OP = SP - OE + TR

OP - Option Price
SP - Share Price
OE - Option Exercise
TR - value attributed to Time Remaining.

If OP = 3.5, and SP = 7.0, and OE = 16 we can calculate TR.

3.5 = 7.0 - 16 + TR
3.5 = -9 +TR
12.5 = TR

So, one can say that if the SP is 7c and the Option price is 3.5, and the Exercise price is 16c, then the value attributed by the market to the time remaining on the option is 12.5c

The TR will reduce as the expiry date approaches.

Hope this makes sense. I'm sure some people are more confused. :)

- Karl