amateurs getting burnt

Unfortunately, early warnings regarding DRKO weren't really heeded by a few following this forum.

Nothing with regards to this company has changed but it seems that some went chasing after the "easy upside leverage" offered through the short dated options - but now they're learning the hard way.

Lets use an example

Say I purchased 200000 DRKO for $0.04 - $8000 total outlay

This parcel is now worth just over $4000 - OUCH!

The "mug punter" (and lets be honest, there's plenty of you out there who are in this situation) is now in the following situation

-> Do I hold and then try and find $40k to exercise (but hold on....the stock is a dog now...! why would i exercise)

OR

-> Do I sell at a massive loss to someone who's a lot more savvy than I am and probably has the cash to exercise them.

You will notice "stink bids" currently sitting well below the market price.

These WILL get his as holders who don't have the cash to exercise, sell off their holdings and walk off, disgruntled with their tails between their legs simply because they got greedy.

Unless you were intending to exercise the options, you really should have stayed away from them from around the start of November which is when the time decay factor really starts kicking in and volume disappears on the buy side.

You never know, the options might get underwritten yet (which doesn't help anyone holding options from high prices but it adds cash to the coffers)

CONCLUSION - buying short dated options is a mugs game but that doesn't make it the company's fault. It makes it YOUR fault for taking such a high risk. Drake is still very much a company be holding for 2010.