Last sale price of RRS is 6.4c and last sale price of RRSO...

Last sale price of RRS is 6.4c and last sale price of RRSO (strike price 5c, expiry December 2011) is 1.8c

This is absurd but provides anyone holding RRS with a unique opportunity to protect the upside of their investmetn whilst limiting their downside3.

How? By selling RRS and buying the same number of RRSO.

Case study:

Sell RRS for 6.4c Buy RRSO for 1.8c.
Put the remaining cash of 4.6c into a high yielding bank account for one and a half years. Should grow with interst to 5 cents by December 2011.

Result

1. If RRS tanks and is worthless at December 2011, keep your 5 cents.

2. If RRS takes off and is worth say 40 cents at December 2011, pay the 5c (which you have stored at the bank) to convert your RRSO into RRS. You now have the same number of RRS as you sold on 30/4/2010.

This strategy protects the upside of your RRS holding whilst limiting your downside to almost zero.

You do not get a free kick like this in the stock market very often.

My take on it: Anybody selling RRSO under 3c atm is desperate for cash or is just plain stupid.