Lurker: Not arguing, just trying to figure this out. And willing to go OT if necessary....

Let's make a clear example: 15 April calls are currently selling at $.05. I buy 100 contracts for a price of $500. The deal gets signed, permitted, and JV formed before year end, say by December 10th. At that time, let's say the stock price goes to $2.00 within a day or two. That kind of ramp up in the PPS will obviously cause quite a stir, espcially if gold is on the rebound by then.

Now, true, I'm still out of the money by $.50 just to break even, but the expiration is not for another 4 months. Speculators may think the price of the stock will be going higher, possibly well over the $2.50 strike price, at or before 15 April. At that point, my call options are worth more than $.05. Maybe I can sell them for $.20 for a 300% gain (total sale of $2000). That's a great ROI, no?

This is hypothetical, and in your opinion KRY options are a bad trade right now, but maybe others don't see it that way. My point is that the price of the stock only has to be expected to go over the strike price by expiration for the option to be worth more than what I paid for it.