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RR10 (options) May be a good leverage, page-70

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    lightbulb Created with Sketch. 831
    Initial cost of the options: Buy 4,000,000 options at $0.003 each = $12,000
    Cost to exercise the options: 4,000,000 options * $0.01 (strike price) = $40,000
    Cost of additional heads: Buy 923,076 heads at $0.013 each = $12,000
    Total cost: Initial cost + cost to exercise + cost of additional heads = $12,000 + $40,000 + $12,000 = $64,000
    You end up with 4,923,076 heads (4,000,000 from the options and 923,076 bought directly).
    If the price of "heads" rises to $0.02 and you sell all of them, the revenue from the sale would be:
    Total revenue: 4,923,076 heads * $0.02 each = $98,461.52
    Then, your potential profit would be calculated as:
    Potential profit: Total revenue - total cost = $98,461.52 - $64,000 = $34,461.52
    So, based on these numbers and the price of "heads" rising to $0.02, you would make a profit of $34,461.52 minus CGT.

    Of course it could all just as easily got south for you
    Last edited by OzBandit: 19/06/23
 
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