It should be emphasized that the record share price is the exercise price or the exercise price indicated in the option agreement, regardless of the actual market price of the share. As you can see, the longer the time before expiration, the more the option is worth it. Since we assume it is an option, its total value consists of the current value. The first table presents two fundamental pricing principles for options: ESOs are usually bought in pieces over time on predetermined dates, as shown in the investment calendar. For example, you can get the right to buy 1,000 shares, with the four-year to 10-year options being 25% unshakable per year. Thus, 25% of the MSOs that give the right to buy 250 shares would be unshakable within one year from the date of grant of the option, and 25% of them would be unshakable two years after the date of allocation, etc. Option prices are presented below based on the same assumptions, except for the fact that volatility is 60% instead of 30%. This increase in volatility has a considerable impact on option prices. For example, at 10 years until expiration, the ESO price rises 53% to $35.34, while with two years remaining, the price rises 80% to $17.45. . . .
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