schmickboyHope I can help.the GRKOA is an option which is...

schmickboy
Hope I can help.
the GRKOA is an option which is exerciseable in April 2008 ( I think 30th). That means that for every one option you hold on that date you can pay 10cents to convert it into one fully paid ordinary share. An option holder has the right but not the obligation to pay the exercise price and convert it to a share. These options are listed on the exchange and move up and down in relation to the ordinary shares. The movement in the value of the option is related to the moves in the value of the underlying share ( some refer as the head stock).
The value of the option is the value of the head stock less the exercise price of the option ( if the head stock is more than the exercise price then the option price difference is called intrinsic value. Add to this the time value of the option which most people use a Black & Scholes method of calculating ( Google Black and Scholes to find the calculators and the maths). Time value is a really dangerous little animal. The shorter the time left left to run before the option expires, the faster the time value diminishes. On the day of the expiry it has zero value, not a cent or half a cent but zero. Thats when I buy options I look for the best time frame and the lowest possible time value.
The grkoas I bought today cost 12c avge. The shares were 21 at the time, so the intrinsic value was 11 cents and the time value was 1.5 cents. In April 08 that 1.5 cents will be worth zero. If the shares end up at 50 c then the option even with zero time value will be worth 40c. See the leverage. Buy shares at 21 and they go to 50, great return. Buy the options at 12 and the shares go to 50 and the option is worth 40c.
Of course it can all go the other way - leverage can be the ugliest animal on the block so I use it sparingly when I have convinced myself that the head stock is going up and value will be created.
Hope this helps
omg