VALOB, page-17

Agree Flynn. Free money. As someone who has invested in options before (I am currently into a few AGEOB, as well as VALOB) it continually surprises me how often there is "free" money in the options, and I'd suggest the reason is that many (most?) traders/investors ignore or don't know about the options for various stocks, especially if they are short term traders.

Right now, as I am writing, it'll cost me 0.008 to buy a VALOB option, or 2.4c to buy the stock. If I just buy the option (0.008) and then exercise the stock (1.5c strike) I've paid 2.3c for a share that would have cost me 2.4c. BUT, the bigger attraction is that with the same notional $10K to invest, I can buy 416,666 shares @ 2.4c, or I can buy 1,250,000 options @ 0.008c. If I believe a stock is going to go up (which I do in this case, as for AGE) then I'd much rather have the upside of 1.25m options instead of 416k of shares. As you nicely pointed out in your example, it's a significantly higher return on investment.

Of course, that does present a potential problem when it comes time to exercising the shares at expiry (i.e. having access to a bit more money), but it will hopefully be a quality problem given our (and the professionals) expectations of an increasing U spot price. Or just sell the options at that point.