Replies to post #216695 on 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.

[Kaleid]

If I exercise a 2.50 call option a 2.60, does the transaction get booked at 2.50 or 2.60 or half and half?


The value of the option if you sell is that price.
If you exercize....the cost of that option is added
to the 2.50 cost of exercizing

If you bought the calls @ 10 cents then your cost for
1 share is 2.60

If you bought the calls @1.70 cents then your cost for
1 share is 4.20 (i had some)ouch!

It has been my experiance that WAVX options
are harder to make $ at then other options...especially
near E date......I sold what I had last week @.30

[dig space]

lugan, at the strike price ...

manipulation rhetoric aside, in the money call options exert a downward pressure on stock prices as expiration nears.

e.g., if you were sitting on 10 call options (strike 2.50) last Friday at SP 2.85, would you exercise and sell (or short and exercise to cover) to lock in the gain or wait to allow them to expire worthless?

Much of the activity recently may well be simply profit taking. That coupled with the coming expiration of a round of the SS/N-W (the silver spoon neoptism warrants, series I,J,K) and further coupled with the dearth of demand for WAVX shares, and things are actually holding up rather well.