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As you are well aware, the stock market has been crazy so far this year. During times like this, some advisors prefer not to engage clients with equity compensation for fear it will only discourage them. On the contrary, when stock prices are down it's helpful to reassure stock plan participants of the long term potential of their company stock and options. Explaining concepts like Forfeit Value, Leverage and Black Scholes Value included in StockOpter Reports helps plan participants to better understand and appreciate their equity compensation even when stock prices are taking a beating.
Nine Things Participants Need to Keep in Mind: Share this article with equity compensation recipients to remind them of key considerations including the importance of diversification and of working with a financial advisor.
Incentive Stock Option Planning Guidelines: If you have clients with ISO that are thinking about exercising and holding them this year to take advantage of lower AMT rates, read this article first. It describes 5 issues that need to be considered before taking action with ISOs.
New Articles on the StockOpter University:
- Assisting High Net Worth Clients Efficiently: by Kirk Loury
- Dividing Stock Compensation in Divorce: by Jennifer Namazi
- Advisor Technology Recommendations: published in the Journal of Financial Planning
- How to Negotiate Your Stock Option Package: by Tom Taulli
- Trends in 10b5-1 Adoption and Oversight: survey results from Morgan Stanley and the NASPP
TIP - Determining a Stock Option Volatility Assumption: Stock prices have been extremely volatile so far this year so it's probably a good time to update the volatility assumptions you have been using. Keep in mind that choosing a representative volatility percentage for valuing employee stock options is more of an art than a science and any value that can be justified to the client is acceptable. This video explains how to locate volatility information in a company's SEC filings and for market traded options. Comparing these two sources is the best way to arrive at a reasonable volatility assumption to calculate employee stock option value using StockOpter.com.