Options are risky because when they expire - they are dead - no...

Options are risky because when they expire - they are dead - no coming back like a share price can.

But at 5c convert price - with heads at 5.6c as I speak - then they have a good chance of "coming into play."

Right now you can buy CDXO at 2.3c. If you buy CDXO now and convert them to CDX next November at 5c per share then that share will cost you 7.3c. If the share price is below 7.3c next November you lose, if its above 7.3c you win.

Why risk it?

Leverage.

If you have $10k to invest now you can buy 179k CDX or 435k CDXO.

If CDX is 10c next November (or before) you are up $7,900 if you bought CDX, but up $16,750 if you bought CDXO ($33,500 minus the 5c per share to convert costs).

I'd suggest if you can't work this out, then don't play with options.

I've used this leverage to make my biggest gain ever on shares - but its painful watching them expire when you don't get it right.

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