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Cheers,yes it does help,so the 'time premium' will reduce closer...

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Bull Of ASX

1,382 Posts.

27/05/16

23:12

Post #: 17889624
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Originally posted by insertcoin2playy ↑

Bull you dont seem to understand options...
These Options have an exercise price of 4c.

Now options because of the amount of time they have before they expire/the leverage they have, they usually sell with a premium or "time premium".
Basically it lets the seller get the "premium" whilst the buyer is getting the additional leverage.

So if SP is around 5c : 5c - 4c = 1c + timepremium (~0.5)= ~1.5c option price

if SP is 10c : 10 - 4 = 6c + timepremium (~0.5) = ~6.5c option price

As options get closer to expiry generally less time premium is given.

Hope this helps.

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Cheers,yes it does help,so the 'time premium' will reduce closer to expiry,but what about the amount of time you have to wait before you can sell them?

Looks like they'll list at 0.5c,can i sell them 6 months?

Last edited by Bull Of ASX: 27/05/16

TV2 Price at posting: 3.9¢ Sentiment: Buy Disclosure: Held
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