Options help

[Ken]

Hi,

I want to buy options in AXT. the company list on monday.

they expire in 2010 and are exerciseable at 20 cents. the issue price of the company shares are 20 cents.

What should be the starting price for the options?

if the shares open at 30 cents will this mean the options will also go up?

dont know much about options.

so want to find out before i do anything.

 

[money tree]

as a rule of thumb, add 1c per year to expiry. So thats 4c on top of the intrinsic value, or 4c if the shares are 20c. if the shares rise by 10c, so will the option. so a 30c share would give a 14c option.

option value = stock price - exercise price + time value

eg: 30 - 20 + 4 = 14

 

[Ken]

thanks

just found out the options are unlisted.


bugger

 

[son of baglimit]

well that was a quick thread

have a look at NMSO - 2010 expiry, 20c exercise too.

traders hate them for last 18 months of declines, so price is way undervalued, but with new management, new direction, acquisitions, strong backers (MBL), big name clients (SHELL), going places real soon.

with where this stock WILL BE in 2010, the oppies are a bargain at current level. the true believers had there fill under 10c recently, but while under 15c, the profit will still be very sweet.

only read news since march 06 when lange came onboard - prior to that was all fantasy.