You would have to ask yourself why Mr. Mike would buy his options at $.13 when the market was under that price. My assumption would be that he is anticipating a price increase. If he waits for the SP to go up before converting it is all income ( I believe). If he converts now and then the price goes up it is treated as a capital gain with 50% tax free. Could be a good sign. I think Hotmuck pointed out the last time the option sales were mentioned that Mike needed some money for a trip to Asia.