Getting Sloppy With Stock Options Can Be Costly

IMAGE: Tupungato / 123rf.com By Matthias Rieker Being paid in stock rather than cash has made many people rich. But younger workers, and those who haven’t experienced the long-term power of vesting stock awards, haven’t quite caught on. When seasoned employees have a lot of their wealth in employer stock, wealth manager often struggle to persuade them of the wisdom of selling some shares and diversifying. But at the opposite end of the spectrum, advisers say employees less experienced with...

More

Strategic Diversification of Employer Stock

By Bill Briggs, Net Worth Strategies, Inc. The following case study, illustrated using StockOpter Pro, describes a four step process that enables financial advisors to secure immediate and recurring company stock diversification transactions and assets under management. The four steps are: Establish necessity of diversification from concentrated employer stock positions Establish strategy for “dollar cost average” diversification Secure agreement to proceed with the first step of diversification Periodically update the strategy and secure agreement on an immediate implementation action Step 1 is...

More

What Option Holders Should Know About Option Value

by Kaye A. Thomas A good understanding of option value can help the option holder appreciate this important benefit more fully. Armed with this knowledge, the option holder is more likely to adopt a good strategy and avoid common mistakes. It’s not all rocket science At one level, option value is a highly technical subject. You aren’t likely to understand the mathematics of the Black‐Scholes formula, used to calculate option value, unless you’re a rocket scientist, or at least a...

More