I am wondering why people are interested in buying EVGOA Options at 1.4c now when they will expire in Dec-09.
The obvious answer is that if you buy 2 x Dec-09 Options then you will qualify to buy 1 new Dec-11 Option for 0.1c.
This means that the 1 new Dec-11 Option will have cost you 2.9c (ie 1.4c x 2 + 0.1c).
Thus, when every other shareholder is issued their 0.1c Options and they start trading in the New Year, the new Options would have to trade at >2.9c before the Dec-09 Option buyers are ahead.
The big question is will the Dec-11 Options initially trade at greater than 2.9c?
My suggestion is probably not as they are currently out-of-the-money and there will be many Dec-11 Options that will change hands immediately for quick stag profits.
Instead of buying EVGOA in an effort to get access to the Dec-11 Option I would suggest it be better to hold off and buy on market, or just buy the heads now.
I could be wrong...
Cheers John
EVG Price at posting:
10.0¢ Sentiment: Buy Disclosure: Held
