Options are a bit tricky so I'll do my best to explain them.

To put it simply, a call option allows you to put a small amount of money down now for the ability to buy shares later at a certain price (the "strike price"). For example, buying a $6 October call option will give you the ability to buy shares at $6 anytime between now and October 19 (the expiry date). The call option will have a premium over the share price because you are paying a little extra to "reserve" shares at $6 between now and October. For example, right now you can buy common shares at $6.91 and the $6 call option will cost you $1.50 ($6+1.50 = $7.50). The beauty of call options is that if the share price goes up to $9, you can still buy shares at $6 until October 19. This means you paid $1.50 for the option and it's now worth $3 ($9 less the strike price of $6). Of course, if the share price was at $6 then your option is worthless (buying shares at $6 and selling them at $6 does not make any sense).

The cost of options depends on the time to expiry and the stock's volitility. It makes sense that reserving shares at $6 between now and 2015 will cost more than reserving shares between now until October. It also makes sense that it will cost more to reserve shares at $6 if the share price regularly jumps around between $4 and $10.

So here's how I'm hoping to play options for Pretium. The big catalyst will be the bulk sample report. I'm expecting this to move the share price suddenly when it's released. We know that PVG is very reliable for deadlines so this will help choose which expiry date to buy. Suppose PVG says the bulk sample report will be out at the end of September or early October. Now suppose the date is October 1 and we still have not seen the report. The October call options should be quite cheap because they expire very shortly afterwards. Let's imagine the share price is $6.90 and the October $7 call option will cost $0.35. If we buy these options and the share price jumps up to $8, that call option is now worth $1. This means the option is worth triple what we bought it for while the share price has only gone up 16%. It's definitely a gamble, but if the conditions are right I might take it.