ctpo versus ctp, page-7

Diamar,

As I understand it the intrinsic value (IV) of options is calculated by subtracting the exercise price (EP) from the share price (SP).

CTPO's have an EP of 16c so the intrinsic value is 0 if the SP is 16c or less. At present the CTPO price is simply a speculative price.

Here are some intrinsic values for a rising SP's.

(SP 17c) - (EP 16c) = 1c IV.
(SP 32c) - (EP 16c) = 16c IV.
(SP 50c) - (EP 16c) = 34c IV.
(SP $1) - (EP 16c) = 84c IV.

As you can see the IV of the options here becomes 50% of the SP when the SP is double the EP like you say. As the SP increases thereafter the options get closer to the SP. (a greater %)

The other factors involved in valuing options are the time factor (are they in the money?), good news/bad news & market conditions.

So in short it seems to me that the options are better value with a lower SP if you believed the company will increase in value.

Happy to be corrected on my understanding here. No financial advice intended.