Ann: Successful Completion of 1 for 7 Entitlement Issue, page-20

No rush, it is a long dated option. You lose the optionality of the option if you exercise it straight away. And the best part is it is transferable. See page 39 of the prospectus.


i.e. it will be tradable within that 2 year period. Option price = Current VXR Price - Exercise Price. If it deviates from that then you can potentially buy more VXR shares at a cheaper price than what VXR is selling for.

Let's have an example to see how you can profit from a VXR Option arbitrage trade:

Lets say you have $1,000 to invest.
Scenario 1. You look at VXR and the SP is 75c then you look at the VXRR option and it is trading at 61.5c. In this scenario there is no arbitrage to be made because buying VXR directly and buying the option will net you the same amount of shares. 61.5c + 13.5c = 75c

Scenario 2. You look at VXR and the SP is 75c then you look at the VXRR option and it is trading at 60c. In this scenario there is an arbitrage to be made because buying VXR directly and buying the option will net you 1.5c for each unit. 60c + 13.5c = 73.5c. You are able to buy 1,360 VXR units with your $1k by buying the option. You can only buy 1,333 VXR units with your $1k if you bought it directly from the open market.

Of course subject to liquidity.