How do options work exactly?

[motion]

Sorry mate.

You needed to convert them before 30 Sept.

If their expiry date is 30 Sept they have expired... evaporated... nonexistant anymore.

Thanks mate ... oh well missed the boat on that one....

 

[yachty7]

Re Converting;
Also a newby & have some FNTO options. How does one convert company options? eg I am not at my normal postal address & am wondering if a conversion form or similar has been sent there.
Thanks

 

[bvbfan]

Forms are usually sent but you can probably get one of the company or the share registry for the company.

Sometimes it is also on the website for the company or in option expiry announcement.

 

[yachty7]

bvbfan,
Many thanks for taking the time to reply.

 

[dubiousinfo]

Re Converting;
Also a newby & have some FNTO options. How does one convert company options? eg I am not at my normal postal address & am wondering if a conversion form or similar has been sent there.
Thanks

The share registry for FNT is:

Registries Ltd
Margaret St
Sydney
02 92909600

You can give them a call and they will send you a convertion form by email.

Just remember that if you want to sell the opies before expiry, trading will cease 1 week before they expire on 30 Nov.

 

[Febs]

Hi guys,

I've got a related, but slightly different question which I was hoping someone could kindly answer. (I checked the other options thread but couldn't see a straight-forward answer).

I've recently bought into an IPO for MAV. Say I bought 10,000 shares, which included 5,000 MAVO options "exercisable at $0.20 at any time up to 30 June 2010".

The SP for MAV is currently at $0.34...so am I right in assuming that, if I wanted to, I could do the following right now?
- Exercise the MAVO options, at a cost of $1,000+brokerage fees.
- End up with $1,700 worth of MAV @ $0.34?
- Sell that $1,700 worth of MAV @ $0.34, for a profit of $700?

Alternatively, I could simply sell my MAVO for whatever the current price is?

Just want to make sure i understand the whole "exercising options" process, as opposed to actually buying and selling options.

Also, I'm assuming once exercised, I own regular MAV which I can treat as I would a normal share (ie: instead of selling now, I can keep for however long).

Thanks all. Probably a pretty basic questions, but I'm quite new to this.

Cheers,
- Febs.

Hi guys,

Bit of an update to the above, and a new question.

There's talk of a MAV/MRU merger, which will give "1 MRU share for every 3 MAV shares" and "1 MRU option for every 4 MAV options".

The share deal seems fair enough, as MRU shares are approximately 3x MAV (currently $0.67 / $2.00).

However the option deal doesn't seem as good, as MRU options are only slightly more than 3x MAV options (currently $1.60 / $0.50).

Doing some basic sums, it seems if my MAV options were converted to MRU options, I'd lose out a bit.

So, assuming the merger does go ahead, would I now be better exercising the MAV options, so I have more MAV shares come conversion time?

(Assuming the current MAV:MRU and MAVO:MRUO rations stay the same, of course...)

Cheers
- Febs.

 

[wayneL]

Hi guys,

Bit of an update to the above, and a new question.

There's talk of a MAV/MRU merger, which will give "1 MRU share for every 3 MAV shares" and "1 MRU option for every 4 MAV options".

The share deal seems fair enough, as MRU shares are approximately 3x MAV (currently $0.67 / $2.00).

However the option deal doesn't seem as good, as MRU options are only slightly more than 3x MAV options (currently $1.60 / $0.50).

Doing some basic sums, it seems if my MAV options were converted to MRU options, I'd lose out a bit.

So, assuming the merger does go ahead, would I now be better exercising the MAV options, so I have more MAV shares come conversion time?

(Assuming the current MAV:MRU and MAVO:MRUO rations stay the same, of course...)

Cheers
- Febs.

If there is any extrinsic value in the options, you are better off selling the options and purchasing the equivalent shares or new options, otherwise you will immediately lose the extrinsic value.

If you sell the options, you wil capture the extrinsic value.

If there is no extrinsic value, you lose nothing by exercising.