I would start by reading my other threads---- I explain much of this in serious depth in my post titled: Why options are better than warrants; link: http://agoracom.com/ir/Mannkind/forums/discussion/topics/567265-why-options-are-better-than-warrants/messages/1784099#message
Just think about it logically, if MNKD blows up in price due to success, would you rather have more shares or less? At that point owning $5 or $10 options is irrelevant because both would be drastically in the $. If MNKD is a flop, its going sub $5 like a falling knife so once again, what does it matter what strike price your options weigh in at? Plus, at this stage the intrinsic value associated with the $10 calls is higher, thus the potential profitability in the short run is higher. What you will see going forward is the $5 calls decelerating in increased value compared to the stock price so that the delta approaches 1. The inverse of this will occur as the share price heads upwards for the $10 calls. Any questions let me know as I tend to ramble. Cheers
