Ann: Application for quotation of securities - DXB, page-12

There seems to be a misconception around the conversion of options at 15c to then be sold for 60c to make 4 times your money. The options ASXXBO generally sell for around 15c less than the full shares ASXXB. Anyone wanting to cash out their position on their options wouldn't covert them to then sell the shares, they would sell the options straight away. Ie if you can get 45c for an option today why would you pay out an additional 15c today to be allotted a full share in a couple of weeks time in the hope that you can still sell that share for 60c after it has been allotted. The people converting their options are those taking a longer term position on their holdings. Sure a person with 200,000 options and 200,000 shares might sell 50,000 shares to fund the conversion of their options to give them 400,000 fully paid shares. If the the share price were to stay unchanged for the next couple of weeks, their new share holding would be worth roughly the same as their current shares plus options, so no gain there. They are outlaying the money to convert rather than sell the options because they are convinced the shares are about to increase in price and want to have a larger holding for when that happens. Don't be conned by the down rampers who want to drive the share price down, they too want to increase their holdings (as cheaply as possible) to be ready for when the prices go to where they are obviously heading.