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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Enigma who wrote (6541)	7/8/2002 8:21:08 AM
From: tyc:>	Read Replies (1) \| Respond to of 33421

Re stock options, profits, and reverse leverage to the company's own market price. Is this valid thinking ? There is a useful concept in mining stocks called "leverage". Most mining stocks provide their leverage to metal prices in their annual reports. You know, "for every ten dollar change in the price of gold, profit and cash flow changes by $MM of $x per share". Let's say a company has two million outstanding options in its stock remuneration program, That means that for every dollar change in the price of its own stock, its profits will change by two million dollars (or $x per share).