The NASPP cited that the study by the Derivatives and Options Research Coordination Society (DORCS) “makes significant progress in understanding some of the motivating factors underlying stock option exercise behavior.”
According to NASPP, DORCS has “invested years in developing cutting edge behavioral models based upon the inverse transformed negative Gaussian probability distribution” – a unique approach that NASPP says has allowed for the testing of numerous drivers of exercise behavior, many that have never been studied by other firms.
“ The study leaves no rock unturned, and the results may be surprising tosome, although intuitive,” noted Terry Adamson, Chairman, Society of Actuaries Study on Exercise Behavior.
Summarized below are some of the primary drivers of exercise behavior as determined in DORCS’ massive database of over one billion option grant and exercise transactions.
The study is online HERE
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