John0428
In addition to the response by 'Kortaredrew'..these option can be bought and sold by anybody. So if you wish, you can buy them. However, the exercise price is 2 cents (that is .02) and these option are currently selling for 1/10th of a cent (.001cents). So the fully paid shares (Heads) would need to reach at least 2.2 cents (.022) before you would be in profit by exercising the option by paying 2 cents (.02) to convert them to fully paid shares (Heads).
Further these options expire at the end of this year, so the Heads price needs to 2.2 cents or higher before the end of the year to make it profitable to convert the options to Heads if you bought them for .001 cents each.
The attraction of Options is that you can buy a lot when they are at the current price eg. 10 million would cost you $10,000 @ .001cents each.
There are then a number of strategies
(1) If you bought 10M at .001cents ($10,000) and the heads when up to 3 cents (.03) each. (as an example) You could converted them by paying $200,000, and sell them at 3 cents (.03) for $300,000 and make a profit of $80,000 less brokerage.
(2) Alternatively as the Heads price increase, the selling price of the Options increases in a direct relationship to the potential of the Heads to increase in price and the reducing period of time in which the options expire. So again if you bought 10m at .001 ($10,000) The potential for buying them at .001 is that as the Heads price increase, the options become more desirable and the options price increase. For example, if the Heads were 1.5 cents, its likely that the Options could be .003 to .005 cents each. For the purpose of this exercise, say they are .003 cents each. Well if you sell 10m at .003cents that is $30,000 less the initial buying costs of $10,000 equals $20,000 profit less brokerage.
As mention by another HC contributors a few days ago. The attraction of options to the Directors of VIC is that if they can improve the share price of Heads through their running of the company, that if the Heads were to surpass 2 cents before the end of the year, that there is the potential for option holder to convert their options to Heads by paying 2 cents each. This would equate to around $13.5 million cash paid to the company. A massive injection of cash and all for free. All they got to do is run VIC well and get the share price up before the end of the year to beyond 2 cents. If they don't then it's a lost opportunity for the company and a lot of shareholders are not going to happy that they couldn't make a profit on their options.
The above is my opinion and my understanding and I do not profess to be the font of knowledge on the subject. No doubt others will correct or clarify if necessary.
Expand
(20min delay)