Re: Why Options are Better Than Warrants
in response to
by
posted on
Mar 13, 2013 06:13PM
Edit this title from the Fast Facts Section
Baba,
If the share price reaches the $12 range in your example, and you are uneasy about what will occur in terms of how the share price will move going forward, you should exercise the option early, hold the shares and place in a trailing stop loss to hedge your risks accordingly. Holding the options in your scenario is a poor choice because they will be trading at a factor of 2+ strike, therefore the liquidity on them would be very poor and they would lack time value/intrinsic value. I am posting the graph in a seperate topic thread for easier viability. cheers