Options versus consolidated shares?

[digster]

RRL recently consolidated their shares 1:10 and since then, I have watched the stock slowly track down towards pre-consolidation prices (roughly around the $0.10 mark - yesterday it was $0.12). I want to keep investing in this stock but am worried that another consolidation will take place (not to mention further dilutions)... I expect it will be a number of years before the company starts to make any turnovers so that any investment today will be diluted and consolidated to the point where investing early in a speculative stock just isn't worth it.

Is investing in options a way to avoid consolidation/dilution? or will any options be affected in the same relative way?. I am quite inexperienced in option trading so would appreciate any advice on this issue.

I guess another way I could put it is: If I buy 100,000 options today at $0.067 will I be able to still buy 100,000 at the excercise price before they expire in 2014?

[AMR]

Well the company might decide to make a large issue of shares with free options attached which would absolutely destroy the oppies...take a look at TEX for an example. So really, nothing is safe...

[bear]

I guess another way I could put it is: If I buy 100,000 options today at $0.067 will I be able to still buy 100,000 at the excercise price before they expire in 2014?

digster - unlikely options will remain the same as suggested above- usually options are consolidated as well or the strike price for exercising the options is changed.

Either way a consolidation usually results in some price weakness .... and can imply another capital raising is on the way.

Bear

[digster]

Yes, thanks. I guess it all comes down to timing the market. So much for trying to speculate on high risk small caps.