Option price = current stock price - strike price.
Our options are currently 'out-of-the-money', meaning that we'd have to pay 15c to convert one EVGO to an EVG share. If you buy EVGO today at 4c and convert your options to shares, effectively you are really paying 19c per EVG share.
Why are EVGOs currently 4c? Well, we have almost a year until they need to be converted to EVG shares - the market is perceiving future value of at least 20c by the end of the year + there is premium for time.
If EVG goes to 30c before the end of year, what will the options be worth? You were right in the first place, 15c. BUT this is a very dicey game and sometimes the share price doesn't get to the strike before the exercise date, what happens? you lose all your option money!
There's great upside in options, but as always: it depends on your personal risk/reward tolerance.
I have a tendency to confuse - so I hope this wasn't too confusing!?
Best of luck!
Disclosure: I have held the options for a long time and continue to hold. Hopefully we'll hit NPV of LL by year end, anything above that will be a very pleasing bonus!
EVG Price at posting:
13.5¢ Sentiment: LT Buy Disclosure: Held
