Hi @spyglass
I guess either scenario is possible, and I have seen both over the years.
I would say it comes down to the individual holder, their circumstances and how far the options are into the money (or out of it). Close to expiry, options will generally trade at much truer values i.e. FPO price less exercise price. It may also depend on whether you held both FPO's and options, and how many options were on issue compared to the FPO's. (Btw, I don't think I mentioned it in my post above but a company cannot have more options on issue than overlaying shares.)
But you have said above that there is no news expected from the company. So this leads me to think about two things:
(1) How is it that a company has so many in the money options without something positive in the pipeline? and
(2) Was the strike price set too low to begin with?
Not much of an answer I'm sorry.
Glad you found the post helpful.
Regards,
Perdy
