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5,789 Posts.
1846
21/10/10
11:53
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Close two days ago was CCC-7.9c, CCCO-4.9c - so roughly 3c more for each head over the opt.
Since then the heads are up .3/.4c, and the opts .1/.2c.
I do think more are buying into the heads first and figuring out the extra opts leverage later.
The issue about paying a premium for the opts really only seems significant when the stock is at prices like today - or lower.
Take the example when/if the heads get to 20c.
Technically buying today ... make 12c over 8c on the heads - 150% return ... make 15c over 5c on the opts - 300% return.
Therefore if you expect the heads to rise - and that's whu we buy them - at todays prices the opts are the way to go IMHO.
Regards
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