quiet achiever, page-9

because its only a cent in the money with only 16months to run. why pay equivalent 28.8 for the stock (cost of option plus cost to exercise) when you can get the stock now for 21. the added leverage is not worth 8.8 imo. fair value would be closer to 4 - 5 for CRCO imo. btw i am very bullish CRC, so CRCO holder will make a decent buck, but CRCO is not worth the risk at current prices. CRC is much lower risk with about the same return. I will do the maths.

Buy CRC at 21. CRC goes to 40 return = 90%

Buy CRCO at 8.8 CRC goes to 40. CRCO will likely trade at a slight discount to intrinsic (they normally do when they get deep in the money on stock options, as there is exercise risk) I will assume that CRCO is however trading at intrinsic value of 20cents.

8.8 to 20c equals return of 127%.

Some will say that it is an extra return of 37% but imo it is not worth the risk of limited time till expiry. Better off buying the stock then the options. If the stock closes at 19 in 16 months time (unlikely but possible) then CRCO will have 100% loss compared with about 10% in CRC stock.