re: linq - lrfo - scratch As you know the options have a strike...

re: linq - lrfo - scratch As you know the options have a strike price of $1. Which means that on January 18, 2007, if you own options LRFO, you will be required to convert them (IF YOU WISH - hence option-al) to fully paid shares by paying $1. So, those people buying options at 6.5 cents (current price) are hedging that the fully paid will be worth $1.065 or more by this date.

Let's say that the company makes a decent profit announcement (which I believe they will) at a time before Jan 18 2007, and the share price goes to $1.20 (for example), you can expect the options to trade at least 20 cents or higher. The reason it MAY trade at a premium is because of the time value associated with the option. The lower the time value, the closer the option will mirror the fully paid share.

The reason I said that the "options are of interest" is based on the volume traded compared to the fully paid shares since listing. Nice long time till expiry - anything could happen. Set up a position and hope that the FPO doesn't fall by a great deal. Can I also add that the company has a backing of $1.02 a share, so the fully paids are trading below their NPvalue. This can happen because of the nature of the company. It invests in ASX listed and Australian non-listed equities. Sudden movements & news in the resource equities will effect the proftability of the company.

Finally LINQ has a major (12 mill) shareholding in WTE. I think WTE has a great story. A dramtic increase in WTE value will effect the proftability of the fund and as such I'm expecting a good solid performance from LINQ et al. I'll get knocked if I state that WTE will be worth 20+ cents in the next 12-24 months... but lets see.

Hope that explains the question on why people should be interested in the options.
SB