exmo bargain, page-6

EXMO is experiencing 'time decay' as the expiry date approaches in Dec/09. This dilution of option value results from the fact that both EXMO and EXMOA are 'out of the money' (no intrinsic value) and thus only offer time value reflected in their price. EXMOA has almost four years until expiry allowing plenty of time for the options to become 'in the money' (have intrinsic value). Most options expire worthless when time value evaporates. As expiry date approaches, fewer punters are willing to risk this eventuality.

Those less averse to risk may indeed make a lot from an upswing in EXM shares approaching 3¢ before years end but it's a speculative play to say the least.

The time value of the 2012 options appeals more to me and I'm happy to hold them though EXMO may very well be a 'bargain'.