HELP!!! What happened to my share options????

[lisa454]

Ok let me begin by saying I'm embarrassed by having to ask about this. I'm new to trading but have been doing reasonably well so far. i bought shares in a few companies and thought i was doing well. However, today i checked my commsec account and seen that options i bought in a company which i already held ordinary shares in have been reduced to zero in my account making it a 100% loss. The options were available until the 15th of this month. can someone be so kind as to explain to me what has happened?

 

[pixel]

Ok let me begin by saying I'm embarrassed by having to ask about this. I'm new to trading but have been doing reasonably well so far. i bought shares in a few companies and thought i was doing well. However, today i checked my commsec account and seen that options i bought in a company which i already held ordinary shares in have been reduced to zero in my account making it a 100% loss. The options were available until the 15th of this month. can someone be so kind as to explain to me what has happened?

It would help if you told us the codes of the mother share and the option in question.
Most likely though, what you call "available" until the 15th, means they have to be exercised by that date or expire worthless on the 16th. So, unless you pay the exercise price to convert them into ordinary shares, you will end up with nothing.
Due to the "T+2" accounting, trading in options ends a few days before the exercise date.

 

[lisa454]

It would help if you told us the codes of the mother share and the option in question.
Most likely though, what you call "available" until the 15th, means they have to be exercised by that date or expire worthless on the 16th. So, unless you pay the exercise price to convert them into ordinary shares, you will end up with nothing.
Due to the "T+2" accounting, trading in options ends a few days before the exercise date.

Thanks for the reply. Sorry they were options for BGS and BGSO. how would i exercise them? Or how would i have exercised them?

 

[lisa454]

After looking at an announcement from the other day that i missed, the options can be exercised until 5pm on the 15th June. Even with the public holiday i should still have two full business days (Tuesday and Wednesday) to fulfil these options shouldn't i?

 

[skyQuake]

Have a look at :

http://www.asx.com.au/asxpdf/20160603/pdf/437pcvz4dnx83r.pdf

The oppies cease trading on the 8th, thats why your broker marked them to 0.

You can still exercise them however till the 15th. Note that Monday is a pub holiday so you'd better be quick on tues!
BPay takes about a day

 

[lisa454]

Have a look at :

http://www.asx.com.au/asxpdf/20160603/pdf/437pcvz4dnx83r.pdf

The oppies cease trading on the 8th, thats why your broker marked them to 0.

You can still exercise them however till the 15th. Note that Monday is a pub holiday so you'd better be quick on tues!
BPay takes about a day

Yes, I missed that announcement. I haven't received any Bpay information, by mail or otherwise. i will just have to call the company on Tuesday morning and hope i have enough time to send through the payment.

 

[pixel]

Yes, I missed that announcement. I haven't received any Bpay information, by mail or otherwise. i will just have to call the company on Tuesday morning and hope i have enough time to send through the payment.

One thing worth considering, if you haven't already done so:

Conversion of BGSO into BGS means you have to pay 15c for each BGSO to receive one BGS share. That makes your cost base for each new share 15c plus whatever the options cost you.

BGS have recently been trading at 30c. Had you paid, say, 20c or more for your options, your new shares would cost you 35c all up, 5c more than current market value. In that example, you'd want to compare a 5c current disadvantage against a 15c definite loss: the options will be worthless if held past their expiry date.

PS: You could also try to contact Commsec and ask if they will initiate the conversion on your behalf. Maybe they're too big to bother with customer service; I'm sure if I rang my broker, she would definitely help.
Regarding a direct call to the company: You can do so even on Monday, which is NOT a Public Holiday here in WA.

 

[pixel]

BGS have recently been trading at 30c. Had you paid, say, 20c or more for your options, your new shares would cost you 35c all up, 5c more than current market value. In that example, you'd want to compare a 5c current disadvantage against a 15c definite loss: the options will be worthless if held past their expiry date.

Make that "a 20c definite loss".
If you fail to exercise, you write off the full amount you paid for the options.

 

[cynic]

One thing worth considering, if you haven't already done so:

Conversion of BGSO into BGS means you have to pay 15c for each BGSO to receive one BGS share. That makes your cost base for each new share 15c plus whatever the options cost you.

BGS have recently been trading at 30c. Had you paid, say, 20c or more for your options, your new shares would cost you 35c all up, 5c more than current market value. In that example, you'd want to compare a 5c current disadvantage against a 15c definite loss: the options will be worthless if held past their expiry date.

PS: You could also try to contact Commsec and ask if they will initiate the conversion on your behalf. Maybe they're too big to bother with customer service; I'm sure if I rang my broker, she would definitely help.
Regarding a direct call to the company: You can do so even on Monday, which is NOT a Public Holiday here in WA.

To exercise or not to exercise! That is the question!

And when the options are deep in the money, nearing expiry and no longer trading, there generally is no question! There is value to be salvaged by exercising, irrespective of the price originally paid for the options.

 

[lisa454]

Thanks for your help everyone. I managed to contact the company and have been able to send through payment to exercise my options. This was a hard lesson learned as I will be paying slightly more for the options than their current market value, however, if the options expired then I would have lost more. I just have one more question. Since I am exercising my options through the company and share registry company will they still be credited to my commsec account even though I have not processed it through them?

 

[pixel]

Thanks for your help everyone. I managed to contact the company and have been able to send through payment to exercise my options. This was a hard lesson learned as I will be paying slightly more for the options than their current market value, however, if the options expired then I would have lost more. I just have one more question. Since I am exercising my options through the company and share registry company will they still be credited to my commsec account even though I have not processed it through them?

Well done, Lisa,
all good
And yes, Commsec will be notified by the Registry within a few days; they'll then add them to your holdings, but may take their own good time. If you don't find the numbers updated within, say, a fortnight, I suggest you give Commsec a call and prod.