option buyers must have money to burn??, page-26

Nice one, at least you are making an effort to understand which is consistent with the time and effort you spend posting here.

you wrote:
"at 50c GTE price and 20c GTEO price, worth $500k and $200K respectively, just using intrinsic value there"

The rub is you can't always just use intrinsic value for the options when you buy them as there is also a time premium for options that you need to pay. The time premium is a decaying number which you can roughly calculate into an implied interest rate over your position. At or around early June when the stock was trading near 50c buying the GTEO's for around intrinsic value (18-20c) or a bit under was cheap and the market was mispricing them, if I had posted on that day I would have called them cheap. When I posted recently the GTEO's weren't cheap, which seems to gotten the cheer squad hot under the collar.

However since that date the cheap options have underperformed relatively as the downside movement isn't equal as it has a higher beta. The downside from those prices has the FPO's around 34% lower and the options 42% lower. By any measure 7% loss for 1mth is pretty heavy annualised this is equal to 84% (using the close from Friday).

There is a time and place to use options, which is why I have spent a lot of time learning as much as possible. I have learnt from lessons in the early days when leveraged positions moved against me. I can quote my good days like anyone else but the learning often comes from some of the other trades.

Since we are all retail investors I genuinely hope you all make a shed load of cash from your trading/investing with the least downside risk possible.