John Olagues is owner of Truth in Options (www.optionsforemployees.com). Formerly a member of the Pacific Stock and Options Exchange and the Chicago Board Options Exchange, Olagues cofounded Options Research, the first analytical service to provide theoretical options values to market makers and the general public. For years he was considered one of the leading options market makers in the world, having created many of the trading and hedging strategies used today.
John Summa, PhD, is an author, economist, and founder of OptionsNerd.com. In 2001, Summa coauthored the Wiley title, Options on Futures: New Trading Strategies. A former fund manager, he recently launched the ESO educational Web site, HedgeMyOptions.com.
Chapter 1: Introduction.
Chapter 2: Preliminary Concepts and Definitions.
Chapter 3: Options Valuation and Basic Concepts.
Chapter 4: Risks of holding ESOs (Unhedged).
Chapter 5: Tax Consequences of ESOs.
Chapter 6: Straddle Rule and Tax Implications of Hedging ESOs.
Chapter 7: Management of ESOs and Premature Exercises.
Chapter 8: Comparison of Premature Exercises with Early Withdrawal from IRA.
Chapter 9: Non-Hedging Strategic Choices for Managing Your ESOs.
Chapter 10: Basic Hedging Strategies Overview.
Chapter 11: Constraints on Hedging: Real and Imagined.
Chapter 12: Premature Exercise: Pros and Cons.
Chapter 13: Putting It All Together - The 7% Solution.
Chapter 14: Does Hedging ESOs Undermine Alignment of Interests?
Chapter 15: Why Do Companies Want You to Exercise Prematurely?
Chapter 16: ESO Hedging Case Studies - Google, Yahoo!, and Apple.
Chapter 17: ESO Valuation Methods.
Chapter 18: Comparing Restricted Stock with Employee Stock Options.
Chapter 19: Google Semi-Transferable Options.
Chapter 20: New World Options Plan.
Chapter 21: Understanding Executive Abuses I.
Chapter 22: Understanding Executive Abuses II.
Chapter 23: Understanding Executive Abuses III.
Appendix A: ESO Glossary.
Appendix B: IRA Tax Rules for Options.
Appendix C: Did the SEC Encourage Back-Dating and Spring Loading?
Appendix D: Hedging under 1.1221-2, Straddle Rule 1092 and other Tax Implications of Hedging ESOs.