Newbie question here, but what's the thinking on the value of options (i.e. FFXOA) in the case of something like FFX?
Naively, at 10c an option with a 15c strike and today's SP at 20c, I'm getting 2x leverage at effectively 50% interest while taking on the risk that growth is delayed beyond October / timing factors impact execution, when hypothetically I could take a loan at perhaps 8.5% across the 9 months and buy twice the shares in the first place (and sure I could then leverage that again, so perhaps this is a matter of cashflow and access to capital/leverage).
Depending on circumstances I'm then potentially leaving up to 23.5% of profits on the table due to missing out on the CGT discount, or having to find $ to settle the exercised options without selling stock and then holding for an additional year and hoping all goes well.
If I'm doing my sums right (and I very well might not be), while the options would be ITM at a 25c SP, the SP actually needs to hit 38c (and options executed) by October for the options to outperform putting the same investment into shares today, while if the SP hits $1 I'm still ~50% worse off compared to the loan scenario unless I hold for that extra year, at which point I've effectively given up 5% compared to buying the equivalent shares on loan today + any real/opportunity costs associated with that further investment.
I presume I'm overlooking something really simple, but I'm new to understanding options.
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