Hi s4,
Imagine the following example:
LML 33c
LMLO 10c
LML 65c
LMLO 35c (65-30c exercise price, which is a reasonable estimate to have)
In the above example, a person who held LML from 33-65c would have made a 97% profit.
A person who instead held LMLO from 10-35c would have made 250%
So even though the underlying security has doubled, the option is leveraged and any appreciation is magnified.
