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lafont

09/15/09 2:32 PM

#41697 RE: jessme #41695

Have you ever purchased an option of any kind?

What is the difference between the following:

A. I receive 100,000 in salary. I purchase an option to buy 10,000 shares of X at 5.00. The option costs me $25,000. The option expires in one year.

B. I receive $75,000 in salary plus an option to buy 10,000 shares of X at $5.00. The option expires in one year.


The stock is at 4.50 and stays there.

Under which case am I worse off?