EUR Chart, page-224

Hi @Leavold, options are high risk high reward investment. It is more commonly known as warrants, so if you want to Google search it, search "warrants".

The reason why it's now being actively discussed is because there is a realistic possibility that the re-rate would appreciate the stock's share price (EUR) high enough (say 50c for argument's sake) in the near future that the return from today's capital investment on options (EUROA and EUROB) whether to exercise them yourself or sell (as some would want to get hold of them so they could exercise and add to their EUR shares) is a more profitable proposition than acquiring the underlying stock (EUR). Options value is time.

To answer your question directly, the benefit of exercising options than selling is that you get to hold the underlying stock at a set price, as opposed to selling options then having to purchase shares at market value (which can change). Also tax is better when exercising options as selling is considered a "trade" and buying is also considered as another "trade" - there is no "capital gain" when exercising options but if you sell, the gain is taxable.

Exercising options, the way I picture it is a delayed capital raise. It's like participating/bidding and obtaining shares at capital raise (at 7.5c or 18c) but not having to pay a cent until later. If bought at market, it is for a much considerably lower price (like a deposit) than the underlying stock so you can acquire a lot more shares today for a higher capital investment required but don't have to pay later so gives the possible of a bigger return.

For the individual investor, there is not a lot of difference to your two options mentioned if fully divesting, but if to retain ownership of the company, it is better to exercise.

There is a risk that the underlying stock doesn't appreciate high enough to justify the higher return on investment. Options/warrants are issued free to institutional investors during capital raise and some simply sell them off straight away at market to reduce their capital investment (total cost) when acquiring the underlying stock. Each to their own risk management/appetite.

As always, I'd recommend to see a financial advisor for advice when you yourself is indecisive or unsure whether to acquire stock or options.

Users don't tend to answer these questions for beginners because, well they probably can't be bothered, and it's a risk as it could be perceived as financial advice. So I'm not giving financial advice here, just making sure fellow EUR shareholders and new investors know the facts and not be swayed by misinformation on the internet.

The stock market is not a casino, each stock is not a slot machine. I say this because this is what I sense every time these types of questions come up. Investing is measured in years not days, weeks or months. Investment is about purchasing something of value, that is undervalued and knowing what needs to happen to add value post purchase... so when you do sell, the investment is worth more than your initial capital investment... or otherwise allow that investment to give you become profitable and give you passive income eg. dividends.

Take care.