Hi AyandBee,Just adding to what Primaus72 mentioned: In the case...

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    Hi AyandBee,

    Just adding to what Primaus72 mentioned: In the case of OPT0A and 0B, you're essentially paying a premium over the current stock price. That premium gives you more stock control and hence value of more of the upside in the future, while also exposing you to more than your full share of losses if the stock price drops (i.e., a full loss of capital).

    As everyone loves my Python projection graphs what.png , here is what I last posted:

    We are at point (A) OPT about $1. Paying 55 cents for OPT0A or 58 cents for OPT0B. As of today without stock price increase is a terrible idea if the stock stays below $1.60–$2.00 ( green, red, blue line intersect). (B)

    There's no real advantage—in fact, there's more risk: if the price were to decline significantly (as would likely happen if COAST fails), your options would be worthless (D).

    The bullish advantage is that your hypothetical $100k investment, if the price moves above $3 (say, to $5), would yield significantly higher profits (C), eg $750k vs $500k. since you control more shares than you can convert at the strike price. To be brutally honestly I don't like the risk/reward profile for options based on today's values in the graph, because in the short term, I believe we're only talking about values in the grey area. So if I had to invest at todays values I would go with standard OPT, others will have different opinions.


    https://hotcopper.com.au/data/attachments/6826/6826323-09589685fb64b7f33062ca10d7bcd2db.jpg



    Back in July 2024, the prices and projections had very different values and multiples for a hypothetical $100k investment. Note that while the risks have only marginally reduced over the last seven months, the rewards are now significantly reduced. So, for those who invested in July, the upside is higher while the downside remains essentially the same. With hindsight I wish I purchased more OPT0B (red line) , I was trapped in thinking it could get cheaper and I had fought so hard to get my OPT price average low I just didnt want to give it up, even if the maths told me I was being stupid.

    https://hotcopper.com.au/data/attachments/6826/6826350-8d07b3384d9865cc2dc808a404aa2057.jpg


    Last edited by FreeFromStyle: 21/02/25
 
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