So guys,the option play is for leverage in the expectation of a...

So guys,
the option play is for leverage in the expectation of a much higher Underlying SP.
companies issue options usually when they do a cap raise.
so say you take up a rights issue allotment of 100k shares.
the company might say ok we will gift each new shareholder 1 free option for every
share subscribed for. Each option will have a strike/exercise price that is the price you pay
to convert each option into a share in the case of BASO it's 12 cents.
the board then work hard to get the share price up so that shareholders convert their options
therefore adding more funds to the coffers.
the option as it implies gives you the option but not the obligation to exercise The option for a fully paid share.
now........what if you buy it because you want to just speculate on an underlying (BAS)
Steep price rise.
when BAS was at 6.7 in November BASO was 1 Cent.
seeing the announcement of 21 TCF peaked my interest and I saw a golden opportunity.
I thought if I buy BASO here at this price and STO are successful with beanbush then as the underlying (BAS)
rises to say 20cents, then the option will go to 10-12 cents.
This played out beautifully.
BAS has tripled since then BASO is up 900% since then.
So people will buy BASO now for the same reason as before..to speculate.
When BAS doubles from here BASO will triple.
There is also the expiration date.
because the options are in the money they will carry a time premium.
Whenever BAS goe a up hard BASO will lag until BAS stabilises.
on quiet days with BAS you might see BASO move upnto close the gap a little.
The option can be a sentiment indicator that can predict moves on the underlying.
please add to this post to help educate people not in the know.