Woggut, the point is that while what you say is true, no one is going to exercise their options if they are under water anyway, so from a year to year basis, dilution describes a worst case scenario of all grants being converted to stock at a given time. I suppose in the next year if the stock skyrockets and all the previous underwater options then get exercised, there could be an unexpected increase in volume, but if the stock has to skyrocket for that to happen, will anyone care about the little bit of extra dilution anyway?
Also, don't forget that the data exists for anyone to do the research and find out how many options have been issued during the standard expiration time, and how many have been exercised since.
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