SI6 0.00% 0.5¢ six sigma metals limited

Options

  1. 382 Posts.
    lightbulb Created with Sketch. 45
    Ok, this is what I don't get...

    If I spent $100 on options today at 0.006 I get 16,666. If the heads run to 3c I can buy 16,666 share at 1.5c, so I'm in for 2.1c in total. I can then sell my shares at 3c, making 16,666 x 0.09c profit or $150.

    If I spent $100 on the head stock today at 0.014 I would get 7,142 shares. If they run to 3c I would make 0.016c per share or $114.

    So if you think it's going to go to 3c, which I'm thinking is a conservative estimate if all goes to plan, then why would you buy the shares? After all if were still speculating on all of this by the time the options expire in 2016 something has gone terribly wrong. The higher the share price goes the better the choice of options looks. Say it goes to 8c you'd make 5.9c x 16,666 = $983 versus 7,142 x 0.066 = $471. You'd make more than twice as much money.

    Surely there must be a point at which your indifferent between buying the options or the shares? I know there something about time value but like I said the options expire in December 2016 and if something doesn't happen in the next few months everyone's probably done their dough anyway.

    Any thought?
 
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