[Mr. Now]

First of all let me say I really enjoy reading your detailed fundamental analysis of this security.

Now, with these options, your analysis can be near-absolutely perfect, and:

1. You will lose $5965 on the May06 and Aug06 options, if the likely negative price events do not occur before Aug06 expiry.

2. The long-dated options can expire worthless if the likely negative price events do not take KKD below $5 from current $9 area.

Most option purchasers buy options that are too far out the money and/or with not enough time to expiration. This is the #1 cause of loss with options. See McMillan: OPTIONS AS A STRATEGIC INVESTMENT.

Most of the time value comes out in the 3 months before expiry. This makes near-dated options very risky, especially if/when any recent volatility collapses.