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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: sandeep who wrote (72202)	8/20/2002 1:15:14 AM
From: jonkai	Read Replies (1) \| Respond to of 74651

on July 31st. How should it calculate the option price? There really is no market for such a long term option. Black scholes formula can calculate any options value even 10 year options..., most companies issue around four year options that can be exercised in four years, and expire in 10 years....... also any option's value can be calculated at any point in time..... MSFT does it for all of their options every quarter..... and provides this as an "expense" in a second set of books.... (excuse me.... third set of books).....it is always changing, just like the stock price changes.... the stock price changing does not create havoc at MSFT's accounting department.... MSFT's shares outstanding is constantly changing, that does not create havoc at MSFT's accounting department... depreciation....... deferred taxes.... ect... ect... all change every quarter.... it does not create havoc at MSFT's accounting department..... options have a value, and that value can always be calculated..... it depends on the exact same factors as any other option has... including ones that the values have to be calculated every millisecond...... MSFT only has to do it once every three months.... jon.