I would very much doubt that these will be treated like normal options and would be auto-exercised if they are ITM at expiration? We would need to look this up, I will find out when I get some time.
These are more like bonus options so will not follow all the normal rules of listed options (derivatives).
Gee I found Hunter2 as well as Bedger's discussion above fascinating. A really good model there. So if we are to assume the volatility will be somewhat higher due to all the news in the next three years (and more specific to my question in the later 2 of those 3 years), it wont actually matter because the Piggies won't be listed. We will only be able to extract value out of those in two cases as far as I can see, the second being harder/rare.
1) Exercising the pig and obtaining the underlying share for $1.00, when we will hopefully observe the SP at multiples higher than $1 due to all the (good) news.
2) Being able to trade the piggie on some secondary (private) market and sell the option to some agreeable party?
My point is that it wont really matter if the vol. is high as there wont be any option pricing (trading) available? We will of course just be able to partake in making money when we exercise and have the underlying in our account, correct?
Thanks again for your worked examples and commentaries.
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