Options, page-2

Forget about the 5c you paid for the moment :

Options would be "in the money" once the heads are trading above 20c. You're not in front until they trade above 25c though.

If the share price was 23c and you hold 20c options. You could pay 23c a share but why would you when you can convert your options for 20c a share. Either way, you end up with fully paids, it's just cheaper to convert the options in that case. The only problem here is that it can take a couple of weeks till the fully paids turn up in your trading account and the price may have dropped by then.

Similarly, if the heads were trading at 10c, there's nothing to stop you converting your 20c options, except common sense Why pay 20c to end up holding fully paids when you could buy them on market for 10c - the company might send you a christmas card if you converted in that case though