Hi Towie    You are right in thinking the oppies were tacked on...

Hi Towie    You are right in thinking the oppies were tacked on to previous cash raisings as an added incentive to help the CR. Additionally, when their price was low (0.01c) there was no value in selling them and thus the owners likely remained those who got them for free.  Recently however, we have seen them move substantially into the money ie the ordinary shares surpassed the 5c or 6c amounts owing on the OBs and OAs respectively, and therefore the opts have intrinsic value of their own. Holders have been tempted to take some profits and we have seen days of 5-10 million being traded representing a significant portion of the original options on issue (80 or so million in the case of OA's) changing hands.  Some of these have also been converted and with the OA's fast nearing expiry there will be further take up and thus a reduction in the number available to trade which in theory should increase their price at least closer to the oinary BIT less option payment price.  It may be true that overseas investors are not buyers of options and it is certainly true that many investors do not fully understand just how they work - testament to this is the number of times others have explained patiently on this forum (8horse etc). Also, since the number available is less, the options are not as liquid and therefore it is not always easy to get in or out on the volume you wish to trade and inconsistencies occur.  We saw this with dramatic effect when the BIT price exploded up to 44.5c but the OA price only reached 27.5c a massive 17c discount.  In an ideal world, the OA's should have been at 38.5c or even higher and I am amazed that the OB's continue to trade at a discount to the BIT price given they have another year to run and the leverage effect of the lower price.  Admittedly as the price continues to climb this leverage effect is diminished.  To illustrate, if you have $2000 to invest and the BIT price is 10c you can get exposure to 20,000 shares.  If the OB price was at a discount (as it is now) and trading at 4c you would be able to buy exposure of 50,000 for the same $2,000 outlay.  Roll on a good announcement, or a week lake the last crazy one in BIT world, and the share price might have risen to 30c taking the OB price to 23c (an even bigger discount) but the percentage returns and the $ profits can be clearly seen. The 20,000 BIT share holding is now worth $6,000 while the 50,000 OB holding is worth $11,500 !  The same of course can work in reverse, but if you are intending to buy a fixed number of shares, the options are can even be a safer investment.  To illustrate this and ignoring transaction fees, if you were to buy 20,000 BIT at 10c your outlay is $2,000.  If you were instead to purchase 20,000 OB's at 4c your cost is $800 (plus a commitment some time in the future to pay 20,000x5c=$1,000).  Now, if things go wrong for the company, and the BIT price drops down to 3c the buyer of 20,000 @10c has lost $1,400 and the options would have minimal value (thus the owner of them would have lost only their $800 with no compulsion to cough up the option amount outstanding and the options  expire worthless. Lastly, the market cap of the company is usually based on an undiluted figure - the HC figure for example does not take into account the options on issue.  No financial advice is intended in this monologue. GLTAH in the coming weeks.