ARU (ASX) Options insights

Originally posted by bigblackbear: ↑

So I didn't want to trust my "feel" so I went to the source ie ARU Comp rep with enquiry re ARUO "Notice of Exercise of Options" Form (see pic)
so.......... the reply
"Link manage this process for us- the original placement participants would have got the personalised forms on how to exercise. If they had subsequently sold the option, I believe Link should have sent the trade forms and the new holder would be able to get personalised instructions for their new holding. I will forward this email to our Link representatives who may be able to help. We engaged them to manage the process as its too difficult to do internally. All correspondence in relation to share capital is managed by Link rather than the Company as we don’t have this ability. I hope this helps but I’ll let you know if we hear any differently from Link."

Me thinks LMS should be handling it, but maybe they think they aren't cos they're not getting paid for it (according to LMS records) ?? So the forms exist, were sent out to the original placement holders, but not sure if new (bought on-market) holders are being sent them (they should but maybe LMS think they aren't being paid to do so, so why should they)
Stay tuned, I'm sure ARU will sort out soon enough. Anyways nobody should be thinking of exercising these any month (year!!) soon.
PS if anyone would like to BPay for my options.....go right ahead... and thanks in advance for the donation $17,000 should just about do it

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The following is reply from Link Market Services to ARU management :

”Any investor who has purchased an option on the open market will have to contact us on our Capital Markets email at:[email protected] if they would like to exercise their options. From there, the team will provide the investor with a form and details that they can use to exercise their options.”
So in other words “Don’t bother them until your serious about exercising your options” but of course give yourself enough time in Feb 2024 to do it before lapse date.

Originally posted by dooooz: ↑

My ARUO options are detailed in LMS so no issues there, just no reference to exercising them. Might sit on it for a bit and then email, not planning to swap them anytime soon anyway.

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Originally posted by The Stripester: ↑

seems I gave everyone a bum steer on this. I actually contacted Link Services myself and they informed me that they were not involved in the latest options plan which was in late August and that therefore ARU were handling in house. I currently have a contact ARU looking into it and whether options are still available. I can post answer if anyone is interested

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Originally posted by RFB: ↑

With 12K of views and great comments, as the initiator of this thread I thought I’d do a quick summary.The general consensus is the options price should track the share price and be around about 34 cents less (the excise price which is due on expirer 29th of Feb 2024).

Some contributors feel the shares should trade slightly less because of the effort required to convert while others feel they should be slightly higher because of the opportunity offered to ride the share price up for a lower entry costs.

For some people this means a significantly larger # options than shares for others this means the same number of options as shares desired with the money saved being used for other purposes.

There was quite a lot of concern about option holders being wiped out if share price falls below 34 cents while shares are not restricted by time and the price can correct itself over time. This was counter balanced by others some who gave examples in other fields of similar scenarios. For me, the 34 cent excise is a little bit like a stop loss (not they I know how to do that) except that over the next 15 months the shares might dip below 34 cents and then recover.

One contributor thought the thread was “selling Disallowed“ others that the options were a no brainer. Some used fishing analogies (?) that I didn’t understand (or maybe it was just talking about fishing) and there was a number of excellent contributions overviewing computer tools and philosophies that may assist in the decision making around.

There was a standard amount of jargon and acronyms, most of which I do not instinctively understand.

Thanks everyone for your contribution.

For the record, I first bought AFU in 2011, I last bought shares after the strong negative response to institutional and sophisticated investor share placement not long ago. You could say I believe all of the above discussion, I believe that Arafura is great investment that aligns with my principles and that I don’t know what the best idea. So I recently sold all ARU my shares and bought about 3 times the number for ½ the sale price.

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Originally posted by wisdomofsilence: ↑

I think with there being so few of these options available they are being held very tight.
Scarcity value is a thing

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Originally posted by Golden Fleece: ↑

Cheers - I appreciate the in depth reply; it all makes sense.

I must have mis-read / mis-understood the article I read

Cheers and profitable trading & investing

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Originally posted by Albous1234: ↑

Really you should hold the options with exercising them in mind, as opposed to buying and selling up and until the expiry date. Just accept the volatility, and have confidence that the share price will be above 0.44 (exercise price of $0.34 + current price of options at $0.10). The options will only be worthless if the shares become worthless. If you believe in Arafura, you should believe in exercising the options. If so, consider owning the options and owning the shares as of near identical risk.

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Originally posted by tradeprofits: ↑

As BBB says, there is no PIA to factor in.

You simply BPay money, and voila ARU shares appear.

Hardly worth factoring in any negative value to.

If anything Options have more value because of the leveraged exposure without allocating the capital. So there is actually a premium because this leveraged exposure has intrinsic value itself.

For a share that's moving up on excellent fundaments and future valuation, the Options should be trading at a premium with the premium gap closing the closer it gets to the exercise date, as the future potential gain windows narrows.

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Originally posted by wisdomofsilence: ↑

Well played mate.
This game all about ROI, so instead of buying 21,951 heads I was able to buy 100,000 oppies for the same price.
More news re Hyundai coming very shortly imo, and when she runs 100,000 units gives a much better return than 21,951 units.
I have no intention of exercising, just all about ROI in the next 2 years
Absolute steal imo

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Originally posted by Shtevie77: ↑

I picked up 270K of options at 6.3c when they first came out and am already up 42% on this trade with a LOT of upside potential between now and 24th Feb 2024 when they expire.
SP currently at 41c suggests 7c is fully priced with 2c for future growth on the 34c strike price.
Agree that these do seem cheap at 9c as does ARU itself at 41c.
Risk vs Reward after recent announcement heavily favours Reward at these levels in my opinion though options are not for the faint hearted.
If (or when) the SP hits 60c, these will be priced around 26c or a 190% profit at current levels.
Best of luck with whatever direction you choose and, as always, DYOR.

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(20min delay)
Last 16.0¢		Change -0.005(3.03%)		Mkt cap ! $394.2M

Open	High	Low	Value	Volume
16.5¢	16.8¢	16.0¢	$607.2K	3.725M

No.	Vol.	Price($)
49	1414796	0.160
49	2558004	0.155
51	2078828	0.150
15	1873203	0.145
14	855042	0.140

Price($)	Vol.	No.
0.165	153000	5
0.170	945494	10
0.175	1675581	26
0.180	1885979	28
0.185	1100329	28

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