sp should be 5x imho, page-497

I would not take too much notice of the replies you have had. The respondents are either trying to pull your leg or just plain ignorant.
- An option can be bought and sold on the market just like a share
- An option will have an expiry date months out or even a few years out. The expiry date is an important part of the valuation
- If you do not convert to the head share (eg, PTXOC is an option, PTX is the head share) before they expire then your options lapse and are valueless (conversion price of PTXOC is 6.25c)
- a very important reason for buying options is the leverage they give. For example, if the option price is half the head share price you get twice as much exposure to price movements (up or down) since the option price moves fairly similarly to head prices. If you want to maximise your exposure on a stock that you are very confident in and your capital is limited, options are a great way of doing it
- because of this leverage the option price is normally between the head price less the conversion amount, and the head price
- options are normally less liquid that the head shares and you may not be able to make a large sale if you need to, without selling them a bit cheaper than their intrinsic value