The options are the right (but not the obligation) to buy what...

The options are the right (but not the obligation) to buy what will be newly created shares in this case at 10c. That means if the share price goes over 10c to say 15c then you can pay 10c a share and immediately sell at 15c for a 50% profit. If however the share price never goes over 10c and ends up at say 5c when the options expire then you just don't convert them into shares. Normally shares sell at a premium depending on the amount of time left until they expire because its like a lottery ticket but in this case you cant trade the options you can only convert / exercise them. They still have some theoretical value though because of the chance that the share price will go over 10c.

One thing to consider is that these options also represent potential future dilution. If the share price does go over 10c then you will likely see more inflation of the share registry as people convert and more selling over that 10c price.

As for participating and buying at 7.5c and selling immediately if the price is higher yeas absolutely you can do that and many likely will. Its even possible that some might sell all the way to 7.5c and just hang onto the free options. But who knows, no one can predict the future.