Ann: Appointment of Dr Robin Hill - Renowned Geoscientist, page-39

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CJTJ

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14/10/15

09:58

Post #: 16171871
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Originally posted by Muss24au ↑

Yes it is very simple, whilst you have to admire your optimism (or enthusiasm) you should probably use "if" rather than "when" as regards a strike. If the situation stays static i.e "no mother lode" which unfortunately is a realistically possible as striking the "mother lode"!

1,000,000 x .006 = $6,000 fully paid shares. Or
3,000,000 x .002 = $6,000 options (plus potentially a further $30,000 to pay total $36,000)

Options held and out of the money at time of exercise
1,000,000 x $0.006 = $6,000 Fully paid shares, no loss. Or
3,000,000 x $0.000 = $0,000 (a loss of $6,000 or 100%) or
3,000,000 x $0.002 = $6,000 plus $30,000 to exercise making a total $36,000 to hold fully paid shares valued at $6,000. Does not look as attractive as your scenario! Also you may find that as the options approach the exercise date the price will fall if there is no "mother lode" why would you buy the options at $.002 and pay $.01 or $0.012 when you can buy the fully paid shares at $.006. Best case could be that you sell out at $.002 or $.001 (loss of $3,000) and worse case is that close to exercise date they become illiquid (i.e. no buyers), as the numbers will favour the sell side rather than the buy side..

Given that there are some here who do not understand the option market please show both sides and let them make up their mind on the risk reward equation.

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MUSS.....chill out man,

those who do not understand the option market should do their research else where and not on a forum, Muss, it is not that complicated anyway, but thank you for clarifying this better than I did, and thank you now I know how to spell ¨mother lode ¨

MPJ Price at posting: 0.6¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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Ann: Appointment of Dr Robin Hill - Renowned Geoscientist, page-39

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