rrs/rrso value, page-33

re: logic At a simplistic level, the ops shouls be around this value: FPO - 5c + time value. If we assume the time value is 2.2 cents (thanks DS), then at the current FPO price of 5.2 cents, the Ops should be 5.2 - 5 + 2.2 = 2.4cents. The reason the Ops are actually at 1.2c is because clearly the ex rights price on the FPO's will drop to the diluted price (without any new info in the market), of say 4c. So the current ops price is 4 - 5 + 2.2 = 1.2c. IF the FPO price rises to 10c, then you could expect an ops price of about 10 - 5 + 2.2 = 7.2c. At 20c, they should be about 17.2 cents. If the FPO's drop to 3c then expect the ops to go back to 1/2c range.

As I said before, the time value will decay to 0 closer to the exercise date.

The leverage is high, but works both ways.........

This is not advice, just my thoughts.