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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: TimbaBear who wrote (38933)	8/13/2002 3:27:29 PM
From: Casaubon	Read Replies (1) \| Respond to of 52237

You believe in using gimmicry. no: you believe, I believe in using gimmicry. I believe options are a cost which aren't hitting the bottom line. They are a form of wage compensation, which have value, whether or not they are exercised because, they help hire and retain talent. You just don't like how I suggest their value/cost is derived. In essence, you are suggesting the use of historical volatility (cost of option not calculated until it is exercised) as the variable in Black-Scholes equation, and I am merely pointing out that implied volatility may be used in the "pay as you play" US tax code. PS Historical volatility only puts you in the ballpark when you go into the market to purchase or sell over the counter options. The real price is what is offered today. PPS The tenet of my conversation has never been clarity in reporting... That says volumes. I see you are the kind of person who pulls a sentence out of context and tries to spin an unintended meaning, using inuendo and insinuation. So, for the sake of any normal people following this discusion, I will correct your implied message, again. You wrote, "So...under the method of accounting for options via the Black Box (excuse me, Black-Scholes) system, in this scenario the company would have recorded an expense it didn't have....and you believe this promotes clarity in reporting?" I replied, "the tenet of my conversation has never been clarity in reporting though I believe options expensing will lead to greater clarity in accounting" You took it out of context and wrote: "the tenet of my conversation has never been clarity in reporting..." You wrote then wrote, "That says volumes." (with your slimy implication being that I am trying to somehow deceive innocent investors). The statement was meant to draw the argument back to the only premise I was discussing, which is the need to expense option grants. When you wrote, "So...under the method of accounting for options via the Black Box (excuse me, Black-Scholes) system, in this scenario the company would have recorded an expense it didn't have....and you believe this promotes clarity in reporting?" You imply (wrongfully), that my discussion was either about promoting clarity in reporting (It's about the necessity of expensing options) or, you insinuate that my suggestion of using Black-Scholes like calculation to expense options purposely causes accounting obfuscation. You then make the insinuation that I am in support of obscuring good accounting with your "That says volumes" crack. So, to set the record straight: I am in favor of expensing options, options values can be approximated utilizing Black-Scholes type calculations, there is a cost to the company for granting options regardless of them being exercised (thus the potential utility of a Black-Scholes type calculation) and, expensing of options does result in greater clarity for accounting purposes. Finally, you are a repulsive nut case.