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Topic: Stock option


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In the News (Sat 22 Jun 19)

  
  Stock option - Wikipedia, the free encyclopedia
A stock option is a specific type of option that uses the stock itself as an underlying instrument to determine the option's pay-off (and therefore its value).
Options trading, without intent to ever exercise the option, can be used as a form of leverage.
Stock options for the company's own stock are often offered to upper-level employees as part of the executive compensation package, especially by American business corporations.
en.wikipedia.org /wiki/Stock_option   (679 words)

  
 Employee stock option - Wikipedia, the free encyclopedia
Stock options are sometimes jokingly referred to as "golden handcuffs" (in the same vein as golden handshakes or golden hellos), especially in a strongly rising market - the employee may feel compelled to work out the time until they are able to liquidate the stock even if they might otherwise prefer to leave the company.
Those who are against stock option expensing say that the diluted earnings per share metric (the amount of income divided by all outstanding shares and all shares that would theoretically exist if all the stock options were used) clearly shows the economic effect of stock options.
Because most employee stock options are nontransferrable, are not immediately exercisable, and have other restrictions, the IRS considers that their "fair market value" cannot be "readily determined", and therefore "no taxable event" occurs when an employee receives an option grant.
en.wikipedia.org /wiki/Employee_stock_option   (1640 words)

  
 TechNet: Our Issues -- Stock Option Accounting   (Site not responding. Last check: 2007-10-21)
Employee stock options are not freely tradable and are generally not vested until years after they are granted.
There is no circumstance where employee stock options would require a reduction in a company’s assets, an increase in its debt or a decrease in shareholders’ equity.
Stock options are currently broadly based, awarded to employees at all levels of companies across the American economy.
www.technet.org /issues/stock.html   (593 words)

  
 Stock Option Accounting: Defying the Usual Answers
In the case of stock options, some proponents of expensing confuse the legal and economic substance of the transaction, and possibly may be unaware of the entity assumption; this makes some of their statements and reasoning inconsistent.
Stock options are a form of compensation to employees; however, people differ in their conclusions about whether this compensation comes from the existing owners or from the entity.
The outcry to expense stock options is based on an attempt to capture a triangular transaction (involving the employee, the company, and the shareholder) in a two-dimensional accounting model that is not capable of presenting it accurately.
www.nysscpa.org /cpajournal/2004/504/essentials/p36.htm   (1746 words)

  
 ProTech Employee - Stock Option Agreements.   (Site not responding. Last check: 2007-10-21)
Stock options are generally an alternative form of compensation.
Stock options are not necessarily worth more than cash, often they are worth less (or worthless).
In the event that you are terminated illegally, for example for discriminatory reasons, stock options may be considered a part of your compensation for damages purposes.
hslawyers.com /practice/stop.htm   (1381 words)

  
 Feature Articles - Stock to Option Trading
Stock option traders have always been faced with the additional work of not only correctly predicting the underlying security's price, but then also choosing the appropriate option strategy.
Option traders, or any traders or investors, for that matter, will always be faced with being wrong no matter what they do: if the position is a winner, they feel like they should have bought twice as much or, if the position loses, they feel as if they should never have bought it.
Stock traders would be wise to spend a little time looking at some of these idiosyncrasies before they assume that they can make the switch from stocks to options in a flash.
www.bigtrends.com /document.jsp?documentid=915   (1369 words)

  
 TechNet: Our Issues - Stock Option Accounting   (Site not responding. Last check: 2007-10-21)
There is no real cost incurred by a company when it issues stock options to its employees, because a promise to issue options or shares in return for a promise to provide services in the future does not meet the accounting definition of a liability.
Employee stock options typically have long vesting periods and are subject to intense stock market volatility.
Expensing stock options would do exactly the opposite - expensing would likely eliminate the use of options for middle management and rank-and-file workers, as many companies that widely distribute options will be deterred by the prospect of a significant and distorted impact on earnings.
www.technet.org /issues/stock_options_acctg.html   (701 words)

  
 Deferral of Stock Option Gains
The option is about to expire, and the executive is forced to exercise or lose the benefit of any spread in the option.
A stock option, granted pursuant to a plan approved by shareholders, generally enjoys an exemption from the non-deductibility rule of § 162(m).
In other words, if the arrangement merely allows the executive to defer the option spread in the form of shares of deferred stock, or stock units, that ultimately are paid out in stock, there should not be any adverse consequence to the non-expense status of the option.
www.jebachelder.com /articles/970530.html   (2556 words)

  
 Stock Option Strategy   (Site not responding. Last check: 2007-10-21)
Stock options provide and excellent opportunity to leverage the Splitmaster strategies when an option is available.
Options can be risky if you are not thoroughly educated on the various aspects of these trading vehicles.
Although it is up to you, (if you want to buy an option out of the money and with a further out expiration date), the publishers usually invest in an option that is slightly in the money and the closest expiration date in which the sell date is before the expiration date.
splitmaster.com /Strategies/Options/options.html   (1508 words)

  
 Stock Option Trading Recommendations   (Site not responding. Last check: 2007-10-21)
By employing various stock and option screening techniques, we are able to identify trading opportunities that are timely and have attractive profit potential.
Each recommendation is focused on a particular underlying equity and is coupled with a specific option strategy as it relates to the circumstances associated with that particular equity issue and the outlook of the market.
OPTION DIGEST™ IS NOT RESPONSIBLE FOR ANY ERRORS OR This publication is strictly for subscriber’s own, non-commercial, internal use, and for the purposes of investing should only be used by sophisticated investors who are aware of the risks associated with forecasting and trading options.
www.optiondigest.com /stock-option-recommendations.htm   (646 words)

  
 Invest FAQ:Derivatives:Stock Option Basics
This is called "writing" options and explains (somewhat) the source of options, since neither the company (behind the stock that's behind the option) nor the options exchange issues options.
Although options offically expire on the Saturday immediately following the third Friday of the expiration month, for most mortals, that means the option expires the third Friday, since your friendly neighborhood broker or internet trading company won't talk to you on Saturday.
Stock index futures, stock index options and options on individual stocks all expire on this day, and because of this, trading volume is usually especially high on the stock exchanges that day.
invest-faq.com /articles/deriv-option-basics.html   (1570 words)

  
 Fool.com: The Stock Option Travesty [Fool on the Hill] March 20, 2002
If the stock rises, employees over time can exercise their options, receive stock, and profit from the difference between the strike price they pay and the price at which they sell the stock.
Options also help a company retain its most valued employees -- presumably the ones who receive the most options -- because any employees who leave the company forfeit their unvested options.
To summarize, options cost nothing in terms of cash or reported earnings, generate cash and tax deductions when they are exercised, create incentives for employees to stay, enrich management, and boost growth rates, margins, returns on capital, earnings, and, in all likelihood, the multiple the stock market places on these earnings.
www.fool.com /news/foth/2002/foth020320.htm   (1196 words)

  
 Online Stock Option trading made easy.   (Site not responding. Last check: 2007-10-21)
Stock Option trading can be one of the most financially rewarding, (or destructive), investment strategies you can become involved with.
Stock options are bets, in their purest form, that the particular issue involved will go up or down, just like betting on Red or Black on the roulette wheel.
We have been trading and researching stock / option systems for years and that is what we live for, as the stock market is one of the only places in the world where you can walk away with unlimited amounts of cash without anyone thinking twice about it.
www.pitbull.com /pb_docs/stockoptions.html   (940 words)

  
 ESOP / stock option / employee ownership update for June 11, 2003
For 74% of option holders and 76% of stock purchase plan participants, the plan was their first experience with investing, indicating just how basic communication must be about these programs.
These numbers translate into roughly similar estimates of the number of employees the NCEO believes currently hold options (about seven to 10 million) but somewhat lower than the number of employees offered stock purchase plans (we estimate it is 15 million; this survey suggests the number may be closer to 12).
That section provides, among other things, that a payout of convertible preferred stock is a dividend as long as it does not result in a "meaningful reduction of the shareholder's proportionate interest in the corporation." It did not here, the court ruled, because the participants were not the owners, the trust was.
www.nceo.org /columns/cr143.html   (1107 words)

  
 Employee stock options and related plans: articles, books, and meetings
A stock option gives the recipient (the "optionee") the right to buy a certain number of shares in the granting company at a fixed price for a certain number of years.
Stock options are used both in private companies (mainly where there will be a market for the shares) and public companies.
Learn the basics of stock options and related plans, how they work, and what some of the main rules are.
www.nceo.org /options   (323 words)

  
 Stock Option Income - Option Trading, Stock Option Investing
Stock option trading are the only investments I have found that can allow you to take as little as $100 and turn it into $1,000 in as little as two months.
The easiest way to learn about stock option investing is to go to your local book store and buy as many books as you can afford on stock option investing.
Stocks whose price is trending solidly in one direction or another can easily return 200% to 500% in about three to four weeks.
www.stockoptionincome.com   (3174 words)

  
 Stock Splits with Stock Option plays
These are all short term investment strategies involving stock splits and lasting only one day to four weeks, with the last strategy using stock options to leverage these positions.
Testing the widely held belief among traders that stock splits can be a source of profitable investment, the publishers of Splitmaster.com were determined to find exactly where in a stock split cycle is the strongest profit potential.
Splitmaster tracks stock splits for selected stocks from the stock split announcement date through the split date and the period immediately following the stock split.
www.splitmaster.com   (493 words)

  
 Employee Stock Option - ESO
An employee stock option is slightly different from a regular exchange-traded option because it is not generally traded on an exchange, and there is no put component.
The idea behind stock options is to align incentives between the employees and shareholders of a company.
Another problem with employee stock options is the debate over how to value them and the extent to which they are an expense on the income statement.
www.investopedia.com /terms/e/eso.asp   (426 words)

  
 Stock Options Investing.com Advisory Service
The cheaper the option the more you can buy, which means brokerage and subscription fees will impact your profitability less than if you're with an advisor who is recommending more expensive options.
Certain types of transactions in Options Trading involve a high degree of risk and are not suitable for many investors.
An options trading disclosure document containing a description of the risks of Options transactions is required, under U.S. laws, to be furnished to Options investors.
www.stockoptioninvesting.com   (821 words)

  
 Ultimate Option Strategies -- Stock Option Trading Advice
This formidable three part joint venture has produced options publications and services which are unrivaled in content, integrity and in profitability for nearly two decades.
Second, if the stock crosses the strike price (putting it "in the money") before your option expires, you not only win your bet but your percentage gains will be more than had you bought a more expensive option.
Finding underpriced options is simple in theory but in the real world it takes an enormous amount of work.
www.ultimateoptionstrategies.com   (762 words)

  
 Fool.com: Rebutting Stock Option Defenders [Fool on the Hill] April 17, 2002
I had intended to stop writing about stock options after critiquing them in my last two columns, but I feel compelled to rebut the self-serving, nonsensical arguments put forward by defenders of the status quo.
Malkiel and Baumol extolled the benefits of options to "new, entrepreneurial" firms that might not have sufficient cash to pay enough to "attract outstanding workers." True enough, but despite the hysterical claims of option defenders, no one is advocating outlawing options -- merely that their cost be reflected honestly in companies' financial statements.
Malkiel and Baumol argued that options can serve "to mitigate possible divergences between the interests of management and stockholders." There is some truth to this claim, but as I highlighted in my last column, options can also create many perverse incentives.
www.fool.com /news/foth/2002/foth020417.htm   (946 words)

  
 myStockOptions.com - stock options, employee stock purchase plans, ESPPs, restricted stock, restricted stock units, ...
Please explore the content, calculators, and community we offer on stock options, restricted stock, restricted stock units, employee stock purchase plans, and stock appreciation rights.
I did a cashless exercise of 2,500 nonqualified stock options (NQSOs) two years ago, selling all the stock at exercise.
Use myRecords to track your nonqualified stock options, incentive stock options, restricted stock, and stock appreciation rights with our charts and pie-graphs.
www.mystockoptions.com   (906 words)

  
 Stock Option Broker - Online Options Broker - Option Trading Brokers   (Site not responding. Last check: 2007-10-21)
Their spread desk staff is well versed in implementing a wide rage of option strategies and they are able to identify the best exchange on which to execute an option spread order.
Please note that options are not suitable for all investors and investing in options carries substantial risk.
Other systems are option scroll quotes and require you to search for the correct option or show only one quote at a time.
www.poweropt.com /broker-reference.asp   (2087 words)

  
 NetPicks Stock & Option Investing Advisory - Subscriber Page
Published on the internet continuously since 1996 our system uses stock investments, stock option picks and index options and is intended for serious investors who are online trading for aggressive returns.
Whether it's with option trading or stock investments or even shorter timeframes with stock day trading, there is a need for a dependable resource for individual traders to enhance their returns.
NetPicks, through their stock option picks, seeks to provide you, the individual investor, with high powered strategies for active online trading.
www.netpicksllc.com   (237 words)

  
 Option Find - Covered Calls - Hedging and Options   (Site not responding. Last check: 2007-10-21)
The Power Financial Group has a series of products that serves the stock and option markets.
In order to help you learn how to use the search engine, we have created a page of sample queries that may fit one of your investment strategies AS Quotes for covered call option returns on any optionable stock are updated twice per day.
Be certain to independently verify any theoretical return first with your broker as certain equities or options, due to special circumstances, may not be accurately presented.
www.optionfind.com   (367 words)

  
 stock option Definition
An option in which the underlier is the common stock of a corporation, giving the holder the right to buy or sell its stock, at a specified price, by a specific date.
Stocks, bonds and mutual funds are the most popular asset classes and therefore get most of the market's attention, but there are other important investment opportunities every investor should know about as well, including options, futures, and currency.
Although these investments are complex and usually intended for sophisticated investors, it's worth understanding what they are and how they operate in order to decide if they should play any role in your overall investment strategy.
www.investorwords.com /4744/stock_option.html   (208 words)

  
 Stock option accounting arrives at Sun | CNET News.com   (Site not responding. Last check: 2007-10-21)
Sun Microsystems, a company whose chief executive has long opposed treating stock option grants as an expense, is in the process of introducing the accounting measure.
CEO Scott McNealy is an outspoken opponent of stock option expenses, an accounting move that directly diminishes a company's profit.
Sun has been accelerating stock option vesting schedules and awarding stock in addition to options to sidestep some expenses.
news.com.com /Stock+option+accounting+...+Sun/2100-1022_3-5890506.html   (740 words)

  
 Online Option :: Stock Option Trading Resources to Maximize Online Investment Profits & Minimize Risk
The Stock Market was closed all that week and didn’t open again until Monday September 18.
The idea was to see if I could trade stocks and options even on the top of that mountain.
I first tried option trading a couple of years ago and made all of the mistakes that you warn against.
www.onlineoption.com   (3350 words)

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