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Von Rico

5,259 Posts.

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09/04/16

12:23

Post #: 17462745
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Originally posted by Von Rico ↑

With recent positive news it might be worth looking at options.

With just 20 weeks left to expiry date of October 23, 2016 there are 290 million options outstanding with an exercise price of $0.034 which could potentially bring in $9.9 million in just 20 weeks.

With the options currently trading at $0.005, heads would need to trade at $0.039 just to break even on expiry date, although there could be trading opportunities for option holders along the way.

Buying the options is high risk because they could expire worthless, however with the recent good news and a $9.9m carrot the company might be tempted to drive it hard. They could do a lot with that money and although it would dilute the upside a little for shareholders, we would all benefit from the growth opportunities this cash would provide.

So .... as far as the heads go I can see 100% gain to $0.04 within the next 20 weeks if the company can get it together and pull out all stops. Great for shareholders but not so good for option holders given the risk.

It's a different story if we overshoot and hit say, $0.06 in which case the options would be worth $0.026. 300% gain on the shares and 500% on the options.

On the low probability that we have a major run and hit $0.10 we have a 500% gain on shares and 1300% on options. $10,000 shares = $50,000 and $10,000 options = $130,000. A great result but unlikely and probably not enough to induce me to risk all for the options.

Others might disagree.

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Sorry .... too late for an edit, but 28 weeks to expiry, not 20.
cheers.

CDY Price at posting: 2.0¢ Sentiment: None Disclosure: Held
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