options query, page-5

as the price increase or as time goes by, the differentiation will increase out towards 5.

When the share price is at its conversion time, the option is worth the share price minus the option price. So, yes at 25c it would have a 20 c value (25-5)
If the share price was 6 the option would be worth 1

In the short term, if the share was to get to 11, I would be shocked to see a gap of greater than 3.5 as this would be ludicrous for an option that is in the money that is so far from expiry. I would be surprised if an 11 SP didnt result in a 7.5 option price. Just personal opinion however.