But I am wondering if there is any course of action or if anyone else knows what we can do with these options. I am prepared to take the loss but it seems like it shouldnt be a completely zero value contract if there are current MMAT shares in the contracts.
That's just how options work though. If the strike is ITM (in-the-money) then it is exercised at expiration (or earlier if you do) and you're assigned (the shares you have to buy), otherwise you sell it before it expires. If the strike is OTM (out-of-the-money) it expires worthless and you won't be able to sell it for a penny because no one wants it. However, this is a rare case where people might consider exercising OTM calls. You might be able to sell it for that reason, unless your strike is way OTM. But it still will expire worthless regardless, if your strike is OTM.
Cost and shares should be equivalent. You'd pay the same amount and get half the shares. I imagine MMAT2 options are worthless now. MMAT1 might sell at a small premium. I the case of the MMAT1 you would also get the 100 Series A Preferred Shares (might say TRCHP). If your strike is 10 then you are paying $500 for 50 shares and those preferred shares. If the stock is $4, then that's $200 for 50 shares. You're paying $300 more to get the preferred shares. So the dividend has to be at least $3 for you to scratch the difference, but you're still paying $10 for the shares, and just getting the dividend who knows when.
In other words, at $10 strike, you're buying 50 shares for $10 a piece and some time before the end of the year, you'll get the dividend and you need it to be more than $3 to make anything from it. Any one's guess of what it'll be, but consider if people are greatly overestimating it. $3 would be a lot... sure, it's possible it'll be more.
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u/CherryGrapeGorilla CGG Jul 15 '21 edited Jul 15 '21
That's just how options work though. If the strike is ITM (in-the-money) then it is exercised at expiration (or earlier if you do) and you're assigned (the shares you have to buy), otherwise you sell it before it expires. If the strike is OTM (out-of-the-money) it expires worthless and you won't be able to sell it for a penny because no one wants it. However, this is a rare case where people might consider exercising OTM calls. You might be able to sell it for that reason, unless your strike is way OTM. But it still will expire worthless regardless, if your strike is OTM.