Hafto say well done Bendigo.

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glitzbling

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23/02/21

17:07

Post #: 51256001
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Originally posted by bendigo: ↑

Each option gives you the right,
but not the obligation,
to convert it into a fully paid BPH share by paying 5 cents to the company.

The option can be on sold on the ASX market up until just before the expiry date.

So you do have to deal with this option,
either convert it into a share,
or sell it
or let it expire
All by the expiry date
And it will have some worth then even if the shares fall ( as long as they are>5 cents)
This value will be the difference between the 5 cent price to covert and the actual price of the share at the time.

So in Option#2 of your example using your figures

If you had 100,000 options which you exercise & converted to fully paid shares
you would finish up with 100,000 shares.
So you would have 100,000 shares values at $1 per share or
$100, ooo dollars worth of shares.
The total cost of these shares would be the $14000 ( the original price of the options in your example plus the 5cents / share conversion price or $5000 a total of $19000.
Ill put this in bold capitals to make you realise the tremendous leverage of options
YOUR TOTAL OUTLAY OF $19000 WOULD NOW BE WORTH $100,000

Option #1
You decide to sell the actual option for someone else to convert.

Your example of selling the option for 50 cents would not happen when the shares were $1.
The option would sell for far more.
In an actual situation, put simply, if the shares were worth $1.00 each
the options would be worth 95 cents each
An investor would be willing to pay you this,
put another 5 cents for a total of $1.00 convert it into a share valued at $1.00
Again in bold capitals
YOUR $14000 INITIAL OUTLAY ( 100,000 X14 CENTS) WOULD SELL FOR $95,000

This is an even better deal in return on money outlaid
...............................
In answer to your question of what do you get on conversion
The options convert one for one by the payment of 5 cents to become a share
Thats it!

I hope that gives you a better understanding of what seems to confuse many people.
It is not as complicated as some imagine.
But YES you do have to know what it is you’re buying and selling.

Hope that helps
Cheers
bendigo

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Hafto say well done Bendigo.

BPH Price at posting: 18.0¢ Sentiment: Hold Disclosure: Held
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0 Great analysis

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Hafto say well done Bendigo.

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Hafto say well done Bendigo.

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