AGEOB, page-48

If I my add my two bits here: I had an interesting experience with options versus heads. First up, I agree with all that's been said:

• Options seem to offer greater leverage for most of their life
• Leverage reduces as heads get more expensive (this because they do often hold the gap at their exercise price)
• Volatility increases towards their expiration date.

However, when I intended to buy more of a biotech stock some while back, and one set of options was nearing its expiration date, I found that they kept trading for ever less value. Which basically meant that in the final days it was exceptionally cheap to buy options with the intention of immediate conversion.
Had I had nerves of steel, I could have left buying options to just about the last day of trading. There must have been those who never contemplated conversion and were desperately close to losing all value in those options.