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The increase in options, however, imposes additional costs on shareholders; the more options granted, the lower the return for investors, since their holdings are, one way or the other, diluted.
But Ms. Meyer and many others in the field -- as well as, they say, the members of corporate compensation committees -- are not happy to see the increase in options grants.
The announcement of disappointing results by Nortel Networks yesterday was preceded by heavy trading and a sudden decline in the company's stock price as well as by a rapid increase in options trading that could indicate that word of the bad news had leaked out.
On Monday, with shares significantly lower, we observed an increase in options trading volume to eight times the normal level.
Perhaps the strangle-seller is taking advantage of inflated options premium stemming from the 8% increase in options implied volatility on the stock.
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Letters are welcome via e-mail to [email protected] soft optionSIR Your articles about share options (August 7th) miss the larger point that the striking increase in option grants has dramatically tightened the link between the fortunes of top executives and those of shareholders.
The increase in demand for option contracts on Pulte Homes contributed to the 2.3% increase in option implied volatility on the stock to 50.22% Monday.
Elsewhere in the ever-mercurial biotech space, option-implied volatility in another company active in central nervous system therapies, Neurocrine Biosciences, rose 30.3% to 87.5% Tuesday, dwarfing the 59.4% historic reading on the stock, as we registered an increase in option trading volume to nearly 27 times the normal level.
At the right moments, seek opportunities to engage the discussion about re-ups, or increases in options.
The inevitable result was a huge increase in tulip options prices (see below right).
An article in Business Day on Saturday about the increase in style options and prices for men's jeans misstated the ownership of Polo Jeans.
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