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Re: May I ask a stupid question?



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Dean,

In regards to your stock option question.

Options that trade on the exchange are very different from the ones granted
to senior executives at large corporations.

These type of options allow the holder to purchase stock at a predetermined
price and are typically allowed to remain in effect for five to seven years
before they expire.
There is usually a holding period of  one to two years before the option can
be exercised.

Thus, as an example, having the opportunity to buy 2000 shares of Compaq or
Dell Computer at a market price of 3 or four years ago , and being allowed to
do that over the last 5 years will quickly turn one into a millionaire.

By the way, when the option is granted, the "strike price" is typically 15%
below the current market value, so a profit is typically "built" into the
option when granted.

In addition,  Brokerage firms have special programs to provide these
executives the  opportunity  to "exercise"  the options without putting up
any cash.

As they say in the military,  R.H.I.P.

That is also why they don't need to try and trade their way to riches like us
ordinary folks.

All the best
:)

Terry Quinn

P.S.: By the way, remember,  there are only stupid answers, not stupid
questions.