Mmmm you haven't quite explained it 100% accurately."If by...

Mmmm you haven't quite explained it 100% accurately.

"If by expiry date, LRVO is worth 1.00. Then your 100,000 options will be worth $1.00 - 0.30 = $0.70 each. Your investment will be worth $70,000 (not bad for a $2k investment)"

If the heads were $1.00, the profit on 100,000 options would be $70,000 only if you exercise them ($68,000 profit excluding brokerage to be exact). You'll need to have $30,000 on hand to exercise 100,000 options, which will then be worth $100,000 in shares. Meaning total investment is $32,000.

"ok what if LRVO is only worth 0.50? Then the value is only 0.50 - 0.30 = $0.20. And your 100,000 options worth $20,000"

Again, you will need to invest an additional $30,000 to exercise 100,000 options, which will then give you 100,000 shares worth $50,000 with the heads trading at 0.50c.

Alternatively, you can sell the options without exercising them should you not have the funds, as the heads (LRV) gain value.

EG: The LRVO were worth 0.25c when LRV was trading at 0.485c in April 2022, representing a 51% difference.
If we were to assume this would be similar moving forward, for LRVO to be trading at 0.30c, the heads would be trading at 0.60c (super rough estimates).

In the above scenario back in 2022, the options were still "out of the money". Meaning if someone purchased and exercised them, they would be at a loss (0.25 + 0.30) - 0.485c. People generally only exercise options when they're "in the money" (ie. the heads are worth more than the options + strike price). So they'll hold onto the options to see how the heads go, with the option to exercise anytime before expiry - which in this case was 2 years.

The risk comes into play here, in that LRVO expires in less than 4 months.

Big risk/big reward, and a lot of strategies on how to play the options.

Long and perhaps complicated post, but gives more accurate detail if you can understand it.