comparing zyl to zylob

Much debate has taken place over HC re the relative merits of ZYL vs. Zylob. I'd like to put in my two bob's worth that ZYL is the better choice. The rationale:

1. If a takeover for Zylotech happens over the next 6-12 months, chances are the bid price would not be above 6c (which is Zylob's exercise price). In this case, ZYL holders strike it rich whereas Zylob holders lose 100% of their investment.

As Zylotech wins more contracts, they will start attracting attention from major US-based defence manufacturers such as Northrop Grumman, Raytheon and Lockheed Martin. Such companies can buy Zylotech out of petty cash. And if a bid comes in before ZYL doubles its sp from 2c to 4c, chances are the bid will not be above 6c. And even if the bid is at, say 8c, both ZYL holders and Zylob holders would quadruple the money (from 2c to 8c on ZYL, and from .5c to 2c on Zylob), so why take the extra risk of holding the options if there is no extra reward?

2. As Zylob's exercise price (6c) is 3 times ZYL's current sp (2c), Zylob is, what's called in the derivative trading arena, a deep out-of-the-money option. As such, its delta is very low, and percentage changes in Zylob's price would more or less approximate the percentage change in the underlying ZYL sp. This will remain the case as long as delta is low, and delta will remain low until ZYL's sp comes a bit closer to Zylob's exercise price. Delta will start growing at high rate if and when ZYL hits about 4c. So as long as ZYL is trading at the range that it is, an investment in ZYL is more rewarding than an investment in Zylob, and is certainly safer.

Regards.