Wave Systems Corp. (fka WAVXQ)

[rwk]

lugan,

if you exercise a call option, then your pay the exercise price to purchase the shares. So exercising a $2.50 call means you pay $2.50 for the shares for no matter what the closing price of the share. Your cost basis would then be the erercise price plus the call purchase price. So, exercising 10 call contracts (100 shares a contract) struck at $2.50 will mean you have to pay $2,500 to buy 1,000 shares. If the shares last closed at $50 (in about 6 months from now...), then the value of the shares you bought is $50,000.