Not based on B&S, just my own calcs. If there is no leverage...

Not based on B&S, just my own calcs. If there is no leverage then there is no point buying oppies as a fall in SP will be a heavier fall (in %) to the options. I think .6/.7 is fair because in the near term IMO the SP doubling is as good as we can expect. That means if the SP doubles, the oppies should trade around 2c which would be tripling. As it stands if the SP doubles, the options will also probably just double so on current levels they will move the same with more risk for no extra reward. On the flip side IF (and I don't expect this is even a chance of happening) the SP halved, the options would do worse than halve, they would probably lose 60% of current value.

My rule, based on percentages, is that the reward on the way up has to outweigh the negative if it goes down. So to simplify if I see the SP doubling and the options tripling, I would invest in oppies if the SP halving would result in oppies halving. If the SP halving resulted in the oppies dropping by 2/3 then I wouldn't be interested. Oppies multiplying by 3 beats dividing by 2. Oppies multiplying by 3 is a stand off to dividing by 3 so that's not good enough IMO. I want the odds in my favour to begin with. Hope that makes sense.

CnS