Can someone explain the logic behind the options to me please?
Say i have $2,000 to invest.
Current share price is $1.83
Say I take the current ask on the options at 0.60
Say share price at expiry is $2.40.
If I buy shares, for my $2K, I get 1092 shares.
Then sell them at SP of $2.40.
Profit is $620 or 31%
If I bought options, for $2k at 0.60 ask I would get 3333 units.
Share price moves to $2.40 and I convert and pay $1.293 per share and then sell them at $2.40.
My total spend is the initial $2k plus $4,309 equals $6,309.
Profit is $1,690 but only 27%
Smaller % return on the option scenario. Wouldn't I just be better off purchasing $6,309 of shares up front?
