News: Biotron's Hep C drug candidate phase 2a tri, page-7

re: News: Biotron's Hep C drug candidate phas... Take a quick look at the trading on BIT and BITO, particularly since the announcement on Monday. You can buy shares in BIT for 13c or you can buy options for 2.6c whilst retaining the discretion to convert these options to shares for a subsequent payment of 10c.

Now if you wanted to buy a small stake in Biotron, say 100,000 shares, you could pay $13,000 and buy BIT or you could pay $2,600 and buy BITO. If you convert the BITO to BIT in Dec that will cost you an extra $10,000 taking your total cost for the 100,000 shares to $12,600. Thats $400 or 3.2% more for the honour of paying upfront for shares vs options. Normally its the other way around.

Moreover if you buy the options you get to keep most of your cash in the bank for the next couple of months and if the market really goes to crap and the share price drops below 10c then you are under no obligation to hand over the last $10,000 if you don't want to. You can simply buy the stock at a cheaper price on market and save even more money.

Given this, why on earth would anybody be paying a premium for shares whilst paying upfront with greater risk. There is no more reward for having shares over options at this point. The options provide all the same upside but with a limit to the downside. Yes they are quite short dated at this point but given the volatility of the markets why wouldn't you available yourself of a nice little discount coupled with free loss limitation upto xmas ?

The above said, somebody is trying to drip free a very large parcel of optionsinto the market thus the sell orders that keep reappearing at 2.6c. As soon as it is snapped up another sell order is put in. I assume that somebody doesn't want to cough up the cash to exercise.