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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 77.99-0.2%3:59 PM EST
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To: Lizzie Tudor who wrote (65478)5/14/2004 12:23:11 PM
From: Stock Farmer  Read Replies (1) of 77400
 
I don't remember that post, and I doubt I paid it much mind, because all along *as you know* my concern with options expensing was with IPOs and whether the model worked (which I don't think it does).

Then you should probably put on your thinking cap. The model works remarkably well and has stood a tremendous test of time.

Anyway all this is moot really because we're in a bear market. Stock options will expire worthless again for the forseeable future.

Really? It's only been a few days, have you already forgotten the Cisco employees who pocketed almost a billion in change in the last 9 months through option exercise? And what's the average strike price of Cisco options in the last 9 months?

Stock options are worth something on the date of grant. Even to you.

You just posted that you work for options. Are you saying that you are working for compensation that you don't plan on receiving? I thought you were smarter than that.

Now, maybe you come up with a different number than what the Black Scholes model would suggest. That's your choice. And maybe you are indeed the one prescient being on the planet who can figure out in advance what options will *actually* be worth. But it's highly unlikely.

Neither your guess nor a figure given by the Black Scholes model is guaranteed to be right, in the future, when (or if) exercise happens. But if forced to bet, I'd lay odds you are more wrong than it is.

In other words, you're dissing a better model than what you currently find satisfactory.

How smart is that?
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