E*TRADE Launches New Stock Option Management Tool

November 9, 2004 (PLANSPONSOR.com) - E*TRADE FINANCIAL Corporate Services is releasing a preview version of Equity Edge 6, the latest version of its stock plan management and reporting platform.

An E*Trade news release said the preview version of Equity Edge 6 offers valuation flexibility and choice with support for both binomial lattice and Black-Scholes option pricing models.   Equity Edge 6, slated to formally launch in early 2005, will provide companies with the tools to comply with the Financial Accounting Standards Board’s (FASB) final expensing standard when it becomes effective in June 2005 (See   Pressure on FASB Produces Options Expensing Delay ), the company asserted in a news release.

Specifically, accoding to the company, the Equity Edge 6 Preview includes:

  • a binomial lattice model for options that supports the eight inputs recommended by the FASB
  • reporting functionality that assists with calculating the new “suboptimal exercise factor” and “post-vesting termination rate” inputs   recommended by the FASB
  • the ability to compare Black-Scholes and binomial lattice valuations with dollar and percent differences to help companies assess which approach provides the most favorable results.

“Although the FASB has delayed the effective date, it’s critical that companies have tools today that will help them devise a strategy to navigate an evolving regulatory environment,” said Colleen Moorehead, vice president, E*TRADE FINANCIAL Corporate Services, in the announcement.