Another DeGray?, page-158

I'll try.

KAI shares today were 0.061c.

KAIOG options, strike price of 0.025c (what you have to pay to convert it into a share before 31 Dec 2021) today were 0.036c.

You should have by now noticed 0.025 + 0.036 = 0.061, the same as the share price (this will vary greatly and provides an opportunity to buy the oppies cheap sometimes).

The benefit of buying the KAIOG is you only spent 0.036c and oppies can be very volatile and give quick profits (and losses). But you can only ever lose the 0.036c. You paid 0.036c for the 'option' to eventually convert the KAIOG into shares if you wish ie if the shares are well above 0.061c, if not you just wasted the 0.036c.

You do not need to convert (exercise) the KAIOG into shares by paying the 0.025c, if KAI share price rockets, so will the KAIOG, and could be worth 0.20c, you can just sell the KAIOG for a good profit before the expiry date of 31 Dec 2021.

So, buying the oppies is a less expensive way to get the same exposure as the shares, but always remember, you have to add the cost of the oppies to the strike price if you eventually exercise them.

Cheers