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Showing posts from September, 2021

What is ESOP and what are the challenges in ESOP Implementation?

ESOP fully known as “Employee stock option plan” is one of the best mechanisms to reward employees and to attract the talent, this enables employees to participate in the financial success and long-term growth of the company. Indian Start-ups have been adopting the ESOP faster and rewarding their employees, however there are multiple challenges with respect to compliance being faced by the company while implementing the ESOP policy.  There are multiple complex definitions which includes exercise period, vesting period, exercise price, strike price and each one of this carries their own importance hence one should be very careful while implementing the ESOP policy in the organisation. Let us see the definitions of the below mentioned terms. Vesting:  means the process by which the Option Holder is given the right to Exercise the Options granted to him in pursuance of this Plan. Vesting Period :  means the period from the date of Grant of Options till the period of option mentioned in th

Are we in a Stock Bubble ?

We will start the topic by asking the question that should we invest in today’s market? Whether we should follow Michael Burry pessimistic approach or believe in investors like Cathie Wood Optimistic prediction about stock market?  Currently in the context of Indian economy we are hitting all time high in stock market which is trading above 17500. The multiple of earnings that Indian stocks are trading at higher than its been historically, all this is happening post Covid and everyone of us is scared that on the one hand the virus is still spreading through the world and on the other side of the equation we have stock market which is not going down. Investors like Michael Burry who is well known for predicting 2008’s Housing Bubble, warning people about stock market crash very soon by basing their decisions on analyzing metrics like Market Cap to GDP ratio. What is Market Cap to GDP Ratio? It is used to evaluate whether a particular given market is accurately valued in accord

What is Hedging and Speculation with Option?

Options are very handy derivative instruments in the financial market giving its owner right to Buy or Sale an Underlying at a Fixed Price on or before the Specified Period. An Option gives to the holder of it the right to do something but the holder does not have to Exercise this right compulsorily. Options can either be American or European. An American option can be exercised at any time before the Expiry of Exercise Period but European Option can be exercised only at the end of the Exercised Period. It’s nothing to do with the Geographical location. Type of Option in the Financial Market is Call Option and Put Option. Call Option give its Owner the right to buy an Underlying at a Fixed Price Known as Exercise Price before the specified Period Known as Exercise period Simultaneously Put Option Gives the Owner the right to sell an Underlying at Fixed Price before the Exercise Period at an Exercise Price. In Each Option there are two Parties first the Seller (Who writes the option) an