Paprika,Options can be higher risk, higher reward if you are...

Paprika,

Options can be higher risk, higher reward if you are using the leverage to multiple your purchase.

For example,
$10,000 KDR at 40c = 25,000 shares.
$10,000 KDRO at 20c = 50,000 options.

If the share price goes to 60c at options expiry you gain $5,000 in KDR and $10,000 in KDRO (KDRO is 40c).

If the share price goes to 10c at options expiry you lose $7,500 in KDR and $10,000 in KDRO.

BUT.

If you are only buying the same number of shares, they can actually be lower risk and the same reward.

$10,000 KDR at 40c = 25,000 shares.
$5,000 KDRO at 20c = 25,000 options.

If the share price goes to 60c at options expiry you gain $5,000 in KDR and $5,000 in KDRO (KDRO is 40c).

If the share price goes to 10c at options expiry you lose $7,500 in KDR and $5,000 in KDRO.