If you havent traded options before I wouldnt be touching VILO. I got burnt on GDNO and told myself i would never do options again. VILO hasn't gone anywhere near to its 10cent benchmark becuase no one has really had faith in them as most believe that the options will expire worthless. If the excersise date was a lot later say 2012; then the option price would have a lot more drive behind it.
Nevertheless an option is a right to buy a share at a later date for the excerise price plus the premium you pay for the option. Options are very complicated financial tools and the real financial experts realise the risk/return that they have to offer. An option is always a function of the heads, so if the heads go up so do the options, and vice versa. There are many other factors that influence the option price, primarily been - excersise price, time to maturity, and volatility.
LIke i said, if you are new to options you most likely wont know how different factors relate to the option. It is much safer buying heads, unless you want to have a punt (if you dont understand the game) - thus, potentially losing only your capital that you put up.
Reading the last annoucmenet from GGP is extremely positive imo. However, I would have expected an annoucement today if they put the well into production based on the bottom of the well flowing. Nevertheless, Im expecting an annoucment tomorrow on the status of production with massive volatility throughout the day.
Bottom line is always - put in the stock market as much as you can afford to lose.
VIL Price at posting:
7.8¢ Sentiment: Buy Disclosure: Held
