@FXmMay I ask as to the mindset of opting for the options here?...

@FXm

May I ask as to the mindset of opting for the options here?
Note, I'm not judging. I'm asking to better understand how to frame the risk of taking heads (CLA) v options (CLAO).

CLAO's exercise at 4.0c expiring 22Mar24

If you (one) buy CLAO at 0.002, then you require the market to expect that the price of the heads (CLA shares) will hit at least .043 (ie 0.040 + CLAO's being in at least 1 pip profit) by next March? (Note: I am not saying that the heads actually have to hit 0.043)

Though a simplification, I've observed most pundits reckon the SP in the 'near term' [OK, an ambiguous horizon] to reach:

2.5 at best ['it's non binding; it's not a deal until it's a deal....]
3.0 ["du'h. It's what is says on the tin"]
3.5 ["the deal + CLA's other assets man"]
4.5 ["I'm the CEO and part of my job is to champion value"]

Thus, 4.3-4.5 is a narrow landing space - still profitable, mind - at the sharp end of expectations.
Of course, this says nothing about upgraded or new takeover bids for CLA.

For sake of argument, say SP=4.5 is seen to attainable by March 2024, then options go from 0.002 to 0.005 (150%) subject to exit liquidity in CLAO.

Current SP = 2.3. Say March 2024 SP = 4.5. That's (let's just round it to...) 100%
...but of course, there's no time pressure on this play and offers much better risk management. Hold, sell, all/partial... whenever as one sees fit.

It feels 100% on the heads (CLA) offering flexible risk management (no time pressure; 'no' exit liquidity issues) is a better reward/risk play than
the prospective 150% gain on CLAO with a March deadline offering only limited/brutal risk management options. We all play differently of course.

Yep, an improved takeover offer would flip the risk advantage to the CLAO's.

Again, I'm not judging. Genuinely interested to better understand the CLAO opportunity. I enjoy your posts.

Thanks