DENUM...Generally speaking, the higher the price of the heads,...

DENUM...

Generally speaking, the higher the price of the heads, the lower we can expect the premium on the options.

At 70c for example, I would expect the premium to be just 2-5c, whilst at current levels, 11-12c is about right.

As always with options however, being a more sophisticated tool, you generally find the premium (or discount as the case may be), will also fluctuate with the near-term expectations of the stock.

Today's 11c premium is telling everyone the heads have been way oversold and that options holders are expecting significantly higher prices.

At 20c, options a buyer of options needs the heads to be 35c to justify converting them.

Options do provide varying strategies for exposure however, which alsoi has a value that dictates a further dimension to any premium paid.

For me, given my confidence in CVI, the focus is on unit exosure...because I am not trading her, options in spite of the lack of liquidity, are very attractive due to the ability one has to accumulate more units for the same value of buying fewer heads.

Whilst the gap between the two is reasonably wide in percentage terms (options currently 20% less than heads)...when the heads are say 80c and the options close to 70c, the differnce between the two will be just 14%...at $1.50 heads and $1.35 options, the difference is just 11%

Alternatively, I cn sell a tiny number of my options at such heights to fund the exercise of the rest, again ultimately resulting in a greater unti exposure than if I simply heald heads throughout.

Anyway, each to their own...especially in relation to risk tolerances.

Cheers!