If you buy an option - that gives you the ability to convert/exercise the option at any time until 17-Oct-2021 by paying 15c to the company and receiving a new FFX freely-tradable share in return. This is regardless of the FFX share price at the date of exercise - so it allows you leverage, allowing you to buy more pieces of paper (ie future shares) for the same cash outlay now. If you don't exercise the option by the expiry date... they expire, worthless.
However until you exercise that option you are not entitled to any dividends or distributions or to participate in any offers to shareholders. This is relevant for FFX as the company has foreshadowed a spin-off of the Li to FFX SHAREholders. There will be a cut-off day for that entitlement - optionholders would need to exercise before that date to participate.
This is an unusual situation, the normal leverage (nearly 6 months layby) is unlikely to be worth very much given the likely large value of the free entitlement.
FFX Price at posting:
38.0¢ Sentiment: Buy Disclosure: Held
