ESO Forfeit Value Concepts

    A video describing what equity compensation recipients are really leaving on the table when they leave their company to work for another.  It is more than just the in-the-money value of the unvested stock and options.

More

Employee Options: Exercise Strategy in Volatile Market

The *Insight Ratio® is a powerful metric that indicates when it is timely to exercise employee stock options and diversify the proceeds (that is, take some money off the table). The option holder, probably with the assistance of a financial advisor, selects an Insight Ratio, say 10% that is appropriate to her financial situation (e.g., risk tolerance, level of concentration in company stock and options, and time to retirement). The key is to follow the discipline of exercising and selling...

More

Insight and VaR Ratio Concepts

    A video describing the Key Ratio Dashboard and concept on StockOpter.com.  The "Insight" and the "VaR" ratios illustrate the risk v. reward and are good factors for determining when to exercise.

More

Summary of Academic Research on Subjective Valuations of Stock Options

Employees' Subjective Valuation of Their Stock Options: Evidence on the Distribution of Valuations and the Use of Simple Anchors (Summary of Findings) This research examines employees’ subjective valuations of their stock options, compared to firms’ opportunity cost of issuing those options. In both “real-world” and experiment data, results show that a significant proportion of employees (30%) and experiment participants (47%) apparently fail to fully incorporate the time-value component of option value, and instead anchor on three readily-available option values, two...

More

Equity Comp. Concentration Concepts

    A video describing the "Concentration Dashboard" in StockOpter.com and the concepts it is based on.  In general, equity compensation concentration is the value of company stock and options (vested & unvested) compared to all other investments.

More

ESO Leverage Concepts

    A video describing the concept of stock option leverage using the StockOpter Dashboards.  The leverage inherent in ESO results in value percentage increases greater than the percent increase in stock price.

More

Black Scholes Value Concepts

    A StockOpter video describing the "Black Scholes Dashboard" and the concepts it is based on. Black Scholes is a methodolgy for illustrating the fair or full value of an option (In-the-Money value + Time Value)

More