So today I did some basic maths to decide whether I want to go with the basic shares or the options.
In the end I've decided to go about 30% shares and 70% options as I believe the company is starting to gain some traction and the options will be more profitable in the long run.
The expiry on the options is November 2019 for anyone who doesn't know.
Here is my working out put into the simplest form I could for those who can't decide which path to go down.
Please point out if my information is incorrect.
As you can see, at the current prices on both IMC and IMCOB the heads (IMC) are more profitable up until the 90c mark. After that the options will be making you a better profit.
After we received our P2 results, my initial price target/estimate on this by the end of 2018 was $2.50 and the options expire 11 months after that so there's plenty of time to reach my target. I'll reevaluate my target as we get closer/the company moves along of course.
I'm posting this as I had a friend who didn't know how the options he had actually worked and I figured he can't be the only one out there who doesn't understand the potential that options have.
So here's a very brief explanation in layman terms (I'm a layman myself)
Instead of buying a share you can instead buy and 'option' to buy a share at a later date. Currently the option to buy a share of IMC is called IMCOB and will cost you 15c.... Now what?
Now you have until the expiry date of the option to convert that option (IMCOB) into a share (IMC). The expiry for the IMCOB options is November 2019.
To convert your option into a share you will need to pay a price to the company which you're investing into (Immuron), often referred to as a 'Strike price'. In the case of IMCOB the strike price is 55c. So in total you will pay the price to buy the option initially (15c) as well as the price to convert the option (55c) for a total price of 70c.
The advantage of the options is that you can buy a lot more of them with your initial investment (See the image above).
The disadvantage is that you need some money to convert them when the time comes.
In the example above you can see that $1000 today can get you about 2272 shares or 6666 options.
You will need a further $3666 to convert your options into shares at the strike price of 55c. If you cannot afford to convert all of the options at once, you can do it bit by bit. You can convert your options anytime up until they expire.
Hope this helped someone!
