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Options by definition are worthless when they are granted, because strike price is the current estimated value of the stock.
by analyst74 9y ago
Options by definition are worthless when they are granted, because strike price is the current estimated value of the stock.
- rileymat2 9y agoThis is not true, the right to purchase at the current price but not the obligation has value in itself. Of course this is no where near the sum of the strike price for the options.
- harryh 9y agohttps://en.wikipedia.org/wiki/Black%E2%80%93Scholes_model https://en.wikipedia.org/wiki/Black%E2%80%93Scholes_model
- pkolaczk 9y agoStrike price is estimated through 409a valuation, which is typically very conservative and considerably lower than the fair market value of the stock, which is frequently less than the evaluation made by investors.