For a volatile illiquid stock like GTE, company options make a lot of sense. Your percentage loss is likely to be similar or only slightly more with a retracement, yet profits much higher percentage wise. GTEO traded 10c above intrinsic for ages before the retracement last year.
If I had borrowed money to buy GTE instead of GTEO, it would have cost me $150k for 1 mil GTE rather than 30k for 1 mil GTEO, and at 50c GTE price and 20c GTEO price, worth $500k and $200K respectively, just using intrinsic value there. The stock is a 3.3 bagger, the options 6.3 bagger, twice the leverage for much less risk, as I mentioned, downside percentage much less that upside with many company options.
Closer to expiry of course the risk starts to escalate if you are hovering around the strike price.
GTE Price at posting:
33.8¢ Sentiment: LT Buy Disclosure: Held
