| Frequently
Asked Questions This
page contains answers to common questions handled by our support staff, along with some
tips and tricks that we have found useful and presented here as questions.
- Who are the typical users of "Option123,
v. 6.0"?
- We are a private company, how can we use it?
- Do I need to know "Binomail Option
Pricing Model" or "Black-Scholes Option Pricing Model" in order to use it?
- Many people say that FAS 123 (R) is rather
complicated, will that be a problem in using "Option123, v. 6.0?
- I know Excel spreadsheet, a pretty simple
program developed by Microsoft, but both "Binomial Model" and
"Black-Scholes Option Pricing Model" are pretty complicated, it seems … You
know what I mean.
- Can tax rate be adjustable at the date of
forfeiture / estimate when allocating expense over the vesting period?
- We download the price data (daily, weekly, and
monthly) of our stock from http://finance.yahoo.com, can "Option123, v. 6.0"
download the historical data on the Internet automatically?
- I have purchased "Option123, v.6.0,"
how can we manipulate "volatility" calculation?
- How can I conduct sensitivity analysis by
using "Option123, v.6.0"?
- Do you have customer support in case I have
questions in using "Option123, v.6.0"?
- What's your credit policy in case I need to
return "Option123, v.6.0"?
- I notice that you accept business checks for
payment by using "Internet Check", how does "Internet Check" work?
- Do you ship internationally? If you do, how
much is the Shipping & Handling cost?
Typically, if there is an equity compensation plan at your
company, and you want to automate the management, such as tracking its plan, computing the
fair value, and preparing the SEC reports, with much less money, it will be a wise
decision to buy "Option123, v. 6.0".
However, many of our customers also purchase it for automatically valuing warrants, debts,
and other derivatives.
"Option123, v. 6.0" works for both public and
non-public companies. For a public company, volatility is required and can be computed to
estimate the fair value of stock options by using "Black-Scholes Option Pricing
Model". Non-public entities may use the historical volatility of an appropriate
industry sector index instead of the expected volatility of the entity's share price.
No, it is not necessary (but helpful) for you to understand
"Binomial Option Pricing Model" or "Black-Scholes Option Pricing
Model" in order to use our Program. Both "Binomial Option Pricing Model"
and "Black-Scholes Option Pricing Model" are among the most sophisticated
applications of mathematics in finance. "Option123, v. 6.0" can calaulate option
pricing using both models with a single click of the mouse.
Frankly speaking, FAS 123 (R) is pretty complicated.
However, it won't be a problem to use "Option123, v. 6.0". FAS 123 (R) requires
all companies to expense and disclose reports regarding employee options. As mentioned in
our web-site, "Option123, v. 6.0" is designed to assist companies in calculating
the estimated fair value of employee stock options and similar awards as required by FAS
123 (R). It helps you, in a much simple way, expense the far value of employee stock
options besides assisting you in tracking your equity compensation plan. On December 16,
2004, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 123
(revised 2004), which is a revision of FASB Statement No. 123, "Accounting for
Stock-Based Compensation". FAS 123(R) supersedes APB Opinion No. 25, "Accounting
for Stock Issued to Employees", and amends FASB Statement No. 95, "Statement of
Cash Flows". "Option123 v. 6.0" reflects the changes in FAS 123 (R).
Excel is one of the most popular office application
software in business world. We simply prefer to make complicated things as simple as
possible, rather than reinvent the wheel. In fact, we have used Visual Basic for
Application to program the most complicated components in "Option123, v. 6.0".
In many cases, Excel spreadsheets are just places to input, store and display data. As far
as we know, other software companies also use similar programs, such as Visual Basic, MS
Access and etc., to develop similar application software packages.
Yes. "Option123, v. 6.0" is able to adjust
deferred tax accounts for any tax rate changes that arise during the vesting period, while
other similar programs do not.
Yes, one of the new functions that "Option123,
v.6.0" developed is to automatically download the historical stock price info and
dividend data on the Internet. Of course, it is not realistic for us to test the
downloading for every stock on the U.S. market, but we believe that it will work for all
U.S. stocks as long as their historical stock/dividend information is available on
Yahoo!'s finance page. You may also simply copy and paste the stock price data from
your record, just make sure to sort the price data first in an ascending order.
The historical volatility
calculation is presented on the top of stock price worksheet. However, you may not
manipulate the volatility calculation there, other than on "Value" worksheet.
Usually, volatility can be manipulated by changing the expected life of options. It is a
mouse work to compute the volatility for a grant item.
It is simply a mouse work to do sensitivity analysis by
using "Option123, v. 6.0". It provides for each single grant with sensitivity
analysis by assuming these changes: stock price of underlying assets, volatility,
estimated life of option, and risk-free rate by calculating the following 5 Greeks: Delta,
Gamma, Vega, Theta, and Rho at the same time when fair value is computed for each grant.
Yes! We think that customer support is the most important
for us to be in business. All current customers (will be notified separately) may get
on-line support from our customer services department.
Our credit policy is "30 day money back
guarantee" for the delivered items. If you are not satisfied with your purchase,
please simply return the package in its original condition within 30 days and we will
refund your money except S&H with no questions asked.
We do accept business checks for payment. We have an
agreement with Interactive Technologies, Inc. to process the payment by "Internet
Check". Once you fax us the check, we will use the data printed on the check to
complete the payment process. You may also key in the information on our secured web site
by yourself. In any case, please do not send us the original check. For more information,
please visit www.paybycheck.com.
Yes, we do ship internationally. The S&H costs(not refundable) are presented on the Order Form. For U.S. domestic overnight shipping, the S&H charge is $34.95; For
upgrade/international users, please pay $15.00 extra.
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Simple solutions for complicated option valuations and
corporate reportings