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Tag: Stock Options

  • Elon Musk Becomes First Person Worth $700 billion Following Pay Package Ruling

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    Tesla CEO Elon Musk’s net worth surged to $749 billion late Friday after the Delaware Supreme Court reinstated Tesla stock options worth $139 billion that were voided last year, according to Forbes’ billionaires index.

    Musk’s 2018 pay package, once worth $56 billion, was restored by the Delaware Supreme Court on Friday, two years after a lower court struck down the compensation deal as “unfathomable.”

    The Supreme Court said that a 2024 ruling that rescinded the pay package had been improper and inequitable to Musk.

    Earlier this week, Musk became the first person ever to surpass $600 billion in net worth on the heels of reports that his aerospace startup SpaceX was likely to go public.

    In November, Tesla shareholders separately approved a $1 trillion pay plan for Musk, the largest corporate pay package in history, as investors endorsed his vision of morphing the EV maker into an AI and robotics juggernaut.

    Musk’s fortune now exceeds that of Google co-founder Larry Page, the world’s second-richest person, by nearly $500 billion, according to Forbes’ billionaires list.

    Reporting by Rajveer Singh Pardesi in Bengaluru, Editing by Franklin Paul

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    Reuters

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  • Large Unusual Options Activity in Alphabet Options Shows the Stock Is Undervalued

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    Alphabet (Google) Image by Piotr Swat via Shutterstock

    Positive news from a judge who is allowing Alphabet, Inc. (GOOG, GOOGL) to keep Chrome has spurred large, unusual options activity in GOOG and GOOGL put options. This highlights how undervalued GOOG and GOOGL shares are today.

    GOOG is at $229.86, up over 8.43% today after a U.S. District judge ruled against a breakup of Alphabet, including not having to divest its Chrome division, according to CNBC. GOOGL stock is also up 8.49% to $229.30.

    GOOG stock - last 3 months - Barchart - Sept. 3
    GOOG stock – last 3 months – Barchart – Sept. 3

    A Barchart report showed this heavy options activity. Today’s Barchart Unusual Stock Options Activity Report shows that 25,745 put option contracts have traded in out-of-the-money (OTM) put options in GOOG stock.

    It also shows other OTM puts in GOOGL shares have had unusual volume (see table below).

    GOOG and GOOGL puts expiring Sept 5 - Barchart Unusual Stock Options Activity Report - Sept. 3
    GOOG and GOOGL puts expiring Sept 5 – Barchart Unusual Stock Options Activity Report – Sept. 3

    In both cases, the out-of-the-money puts are for expiration on Friday, Sept. 5. The heavy volume indicates that the buyers expect the Alphabet shares to retract from today’s surge.

    However, those shorting these puts are essentially willing to buy shares at the OTM strike prices. They are also getting paid good yields.

    For example, the GOOGL puts at the $225.50 strike price have a $1.02 last premium price. That means short-sellers of these puts are making an immediate yield of 0.453% (i.e., $1.02/$225.00) for just 3 days left until expiration.

    It this could be repeated each week for a month, the expected return is a 1.813% monthly yield. That is a very good expected return in this stock.

    Moreover, the investor’s breakeven point, assuming GOOGL falls to $225.00 by close on Friday, is $223.98 ($225-1.02), or -2.3% below today’s price.

    Similarly, the GOOG put options at the $222.50 strike have a 0.2337% 3-day yield (i.e., $0.52/$222.50), or an expected return of 0.935% monthly yield.

    The point is that these investors feel strongly that GOOG and GOOGL shares may be undervalued here. Let’s look at why.

    Alphabet posted higher +14% revenue increase in Q2 year-over-year (Y/Y) with +19% higher net income and +22% Y/Y higher earnings per share.

    However, its free cash flow (FCF) was lower, mainly due to significantly higher capex spending. This was due to its huge investments in AI-focused activities throughout its product line.

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  • Nestlé fired its scandal-clad CEO without a payout—a ‘really unusual’ move, corporate governance expert says

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    When Nestlé abruptly ousted its chief executive Laurent Freixe over Labor Day weekend after revelations of a romantic relationship with a direct subordinate, one detail stood out: He was shown the door without a severance package.

    That, according to corporate-governance veteran Nell Minow, is almost unheard-of in the C-suite.

    “That is really unusual,” she told Fortune. “I think that’s actually a badge of success for corporate governance, because that’s something investors have been concerned about for a long time: CEOs being dismissed and somehow getting to stay on.”

    Nestlé confirmed to Fortune that Freixe will not receive a severance package. 

    For years, high-profile executives who crossed ethical lines have left with multimillion-dollar parachutes. Famously, Steve Easterbrook, the former chief executive of McDonald’s, walked away from the role with a hefty sum of $40 million after getting caught having a consensual relationship with a subordinate. McDonald’s later clawed back $105 million from Easterbrook after finding he hadn’t disclosed sexual relationships with other subordinates at the fast food giant.  

    Adam Neumann—after leading a disastrous charge to take the company he founded, WeWork, public—received $445 million in a payout package during his ouster. And after 346 people died in two crashes during Dennis Muilenburg’s tenure as Boeing CEO, he was not awarded severance but still left with more than $60 million in stock options. 

    Minow said these different outcomes show that boards are not always consistent in how they police misconduct, but that one thing remains the same: Social media has left directors with fewer options to look the other way. 

    “There has been bad behavior in the boardroom for a long time,” Minow said. “But partly because of social media, partly because of the way things get out, the board is under more pressure to respond.”

    The reputational fallout from bad behavior can be brutal. A Polish CEO who was recently caught on video snatching a U.S. Open souvenir hat from a child watched his company’s online reviews collapse to near zero in days. The “John” of Papa John’s caused Major League Baseball to pull its promotion with the pizza chain after he used the N-word during a media-training call in 2018. 

    Boards are slowly adapting, Minow argued. Some have begun docking bonuses or moving faster to terminate CEOs “for cause,” meaning the executive in question committed serious misconduct that warrants dismissal without severance pay. But she warned many still demonstrate  a double standard. 

    “If you see some hypocrisy in the board, by the way that they handle the CEO versus the way they handle a middle manager, that’s a green light for employees to behave badly themselves.”

    Even the apology, she said, operates as a test of governance. Minow keeps what she calls an informal “hall of shame” of poor executive apologies. The worst, she explained, dodge responsibility or fail to show how the company will prevent a repeat. The best are blunt, swift, and backed by action.

    Ultimately, Nestlé’s move may prove a turning point. By denying Freixe a golden parachute, the Swiss food giant signaled that boards are starting to treat reputational risk as seriously as financial risk, and that missteps at the top no longer guarantee a cushy landing.

    Fortune Global Forum returns Oct. 26–27, 2025 in Riyadh. CEOs and global leaders will gather for a dynamic, invitation-only event shaping the future of business. Apply for an invitation.

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    Eva Roytburg

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  • Employees Who Joined Nvidia 5 Years Ago Now Millionaires And Coasting In ‘Semi-Retirement’

    Employees Who Joined Nvidia 5 Years Ago Now Millionaires And Coasting In ‘Semi-Retirement’

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    Employees Who Joined Nvidia 5 Years Ago Now Millionaires And Coasting In ‘Semi-Retirement’

    Nvidia (NASDAQ:NVDA) has seen incredible growth in recent years. Since the beginning of 2024, the company’s stock has jumped 167%. Over the past five years, it has surged by an impressive 3,450%.

    Given these figures, it’s easy to see why many NVIDIA employees who joined the company five or more years ago are likely millionaires today. Additionally, many midlevel managers at NVIDIA reportedly make over $1 million a year, thanks to stock options and the overall appreciation of the company’s stock.

    However, being flush with cash now means that many established Nvidia executives are reportedly operating in “semiretirement” mode, which caught the attention of CEO Jensen Huang. They are financially comfortable enough that they don’t seem motivated to work as hard as they used to.

    Don’t Miss:

    In response to questions about ‘semiretired’ employees, Huang advised all workers to act as the ‘CEO’ of their own time and be responsible for determining their work ethic. Still, even Huang received a 60% pay boost last fiscal year, and his compensation reached $34.2 million as Nvidia’s market value is now $3.2 trillion.

    But not all Nvidia employees think they’re rich. As one Nvidia engineer earning $250,000 a year shared with Business Insider, employee salaries at the company are only impressive at first glance. He explained that although some Nvidia employees might be lucky enough to become millionaires, “a million doesn’t go too far.”

    This engineer, based on the West Coast and having joined Nvidia a few years ago, receives almost half of his base salary in the form of restricted stock units (RSUs) annually. He pointed out that from an outsider’s perspective, it might seem like all Nvidia employees are rolling in money, especially with the company’s stock skyrocketing.

    Trending: A startup that turns videos into games gets backing from Mark Cuban and opens a round for regular investors at $250.

    However, he clarified that not everyone receives a large number of RSUs as there’s a limit on how many stock units employees can get. Even the top performers are capped at receiving 50% of their base salary in stock each year.

    “You will end up cashing your stocks to meet your annual obligations in terms of personal taxes, property taxes, and any other expenses you will have,” he said.

    As former Tesla director of AI Andrej Karpathy recently pointed out, “Most people don’t HODL, and the government takes half.” In other words, many Nvidia and Tesla employees could have been millionaires if they hadn’t sold their company stock when they immediately could. On the other hand, he added that long-term holders are likely awaiting Tesla to achieve fully autonomous driving with its FSD software before they sell at a premium.

    Keep Reading:

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    This article Employees Who Joined Nvidia 5 Years Ago Now Millionaires And Coasting In ‘Semi-Retirement’ originally appeared on Benzinga.com

    © 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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  • Traders brace for explosion of volatility Friday as $2.2 trillion in stock options expire

    Traders brace for explosion of volatility Friday as $2.2 trillion in stock options expire

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    It’s that time again: monthly stock-market options for August are set to expire on Friday, potentially spurring more volatility in stocks after a bruising three-week run.

    U.S. stock option contracts with a notional value of $2.2 trillion are set to expire, according to Rocky Fishman, founder of newly formed strategy firm Asym 500 and a former head of index derivatives strategy at Goldman Sachs Group. Notional value measures the market value of the stocks, indexes and exchange-traded funds controlled by the options, although the premiums paid by holders of the options are worth much less.


    ASYM 500

    Fishman noted that the size of option-market open interest expiring on Friday is about average for an off-month expiration.

    Monthly options expire every month, but once a quarter — in March, June, September and December — an event known as “Triple Witching” takes place, causing notional value of expiring options to swell as quarterly and sometimes calendar-year options expire along with monthlies and weeklies.

    Sessions where monthly options expire often see higher-than-normal volatility, and options-market analysts warned that the same could happen on Friday.

    Charlie McElligott, a longtime derivatives strategist who publishes research on Nomura’s trading desk, warned clients that option dealers are “short gamma” heading into Friday’s expiration, increasing the potential for option dealers to exacerbate market volatility. McElligott illustrated this tendency in the chart below.


    NOMURA

    Why are dealers short gamma, and what does this mean? As stocks have stumbled, option traders have been buying put options and selling call options. As a result, dealers could be forced to hedge their positions by buying futures if stocks rise and their customers close out their short-call positions, or selling futures to hedge the risk of puts moving into the money.

    This would serve to exaggerate the market’s move in either direction, driving a rising market higher and a falling market lower, McElligott said.

    Dealers could hit “peak short gamma” if the S&P 500 falls to 4,320, sending a wave of puts into the money. If that happens, it’s possible dealers could slam stocks lower as they rush to avoid being on the hook for puts sold to customers. The S&P 500
    SPX
    finished Thursday at 4,370.36.


    NOMURA

    Gamma is used by options analysts to describe how quickly an option’s delta changes. Delta represents how sensitive the price of an option is to moves in the underlying asset. When options are about to expire, delta typically increases dramatically, since small moves that put it closer to being in or out of the money can have a dramatic impact on the option’s price.

    Brent Kochuba, founder of SpotGamma, also cited risks tied to dealers’ short-gamma position in research shared with clients. SpotGamma shares data and analytics about the option market.

    “We have been watching market gamma fall into negative gamma territory all month. Once it entered that range, price action became visibly choppier, as expected during these conditions,” he said in written commentary shared with MarketWatch and SpotGamma clients.

    Option contracts give traders the right, but not the obligation, to buy or sell the underlying asset or currency. Often, options tied to stock-market indexes like the S&P 500 are settled in futures or cash. Options tied to exchange-traded funds like the SPDR S&P 500 ETF Trust
    SPY,
    which tracks the S&P 500 index, are settled in shares of the ETF.

    A put option allows the buyer the right, but not the obligation, to sell shares at an agreed-upon price known as the “strike price.” A call option, conversely, gives the holder the right to buy shares. Put options tend to appreciate when the underlying stock or index falls, while the opposite is true for calls.

    U.S. stocks finished lower on Thursday, with the S&P 500 and Nasdaq Composite poised to record a third straight weekly decline, what would be the longest such streak for the S&P 500 since February.

    The S&P 500 was off by 0.8% on Thursday, while the Nasdaq Composite
    COMP
    fell by 1.2% to 13,316.93. The Dow Jones Industrial Average
    DJIA
    shed 290.91 points, or 0.8%, to 34,474.83.

    In addition to monthly options expiring Friday, weekly options known as “zero days until expiration” or “0DTE” options could further complicate the market’s reaction. A veteran Goldman Sachs Group strategist warned earlier this week that 0DTE traders have been limiting upswings in stocks while piling on the pressure when markets sink.

    See: ‘This is no longer a buy-the-dip market.’ Why this Goldman Sachs veteran is worried about the stock market.

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  • How to Turn Tesla Into a Dividend-Paying Stock

    How to Turn Tesla Into a Dividend-Paying Stock

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    Being an income investor usually means forgoing exciting stocks like


    Tesla


    and


    Nvidia


    for a regular payout. But that doesn’t have to be the case, thanks to an options play known as a “covered call.”

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  • Here’s a Strategy to Bet on Nvidia Without Buying the Stock

    Here’s a Strategy to Bet on Nvidia Without Buying the Stock

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    Artificial intelligence may destroy humanity, but not before creating enormous wealth. Such is the paradox that now confronts investors after


    Nvidia


    recent earnings report inadvertently created a large-scale ethics experiment on Wall Street.

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  • How a Grandma Who Made $35k Earns 7 Figures in Retirement | Entrepreneur

    How a Grandma Who Made $35k Earns 7 Figures in Retirement | Entrepreneur

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    When 14-year-old Sun Yong Kim-Manzolini was adopted from Korea by an American couple, she didn’t know English or much about the U.S. — only that it was supposed to be a place of “freedom.”

    But she was determined to make her adoptive parents proud. “I had to learn to love somebody — a stranger, basically,” Kim-Manzolini says. “But I was willing to do that because they were willing to take me in as part of the family.”

    Kim-Manzolini did everything her parents told her she should do: studied hard, got good grades, went to college. After graduation, Kim-Manzolini landed her “dream job” as a certified medical assistant, and she fell in love with taking care of patients.

    Related: Making the Move from Medicine to Entrepreneurship

    “I thought to myself, There’s no way I’m going to do this for the rest of my life.”

    Yet despite following the “right” path and working hard in her career, Kim-Manzolini, like so many Americans, found herself “living paycheck to paycheck” and “struggling to pay the bills.”

    “I thought, This is crazy,” she recalls. “Why am I suffering financially? I’m working 40 hours a week. That should be enough, right?“

    Of course, it wasn’t — especially since Kim-Manzolini was raising children as a single mother after leaving an abusive marriage. Her then-husband told her she wouldn’t be able to provide for her family on her own and would end up on welfare.

    “And I thought to myself, He might be right,” Kim-Manzolini says. “But I’m not going to let him [box] me into that. Because I could work as many jobs as I needed to.”

    So Kim-Manzolini did. For years, she spent her evenings and limited days off working different jobs to make ends meet: selling vacuums, running a catering business, cleaning houses. Through it all, she continued working as a medical assistant. But the constant grind wore on her.

    “At one point, I thought to myself, There’s no way I’m going to do this for the rest of my life,” Kim-Manzolini recalls. “I need to change to a different job, do different things that will make me money to the point where I could at least take my kids on a vacation or have a day off and spend my time with my kids on the weekends.”

    What’s more, Kim-Manzolini couldn’t fathom working so hard for so long only to be too old to actually enjoy her retirement; she saw the scenario play out time and again in her line of medical work, where patients retired just to “spend all their money on doctor’s bills, emergency rooms and assisted living.”

    Related: How Much Money Do You Really Need in Retirement?

    “I went over my goal, and I thought, Oh my gosh. I was shocked.”

    Kim-Manzolini knew she needed to find more lucrative sources of income — and she started looking into real estate, considering opportunities as an agent and investor in 2014.

    It was while Kim-Manzolini and her new husband were attending real estate classes that she first learned of options trading. “What are you going to do with all of the money you make in real estate?” People asked her. “Why don’t you look into options trading?”

    Although Kim-Manzolini didn’t know anything about options trading at the time, she was familiar with buying and selling stocks. She worked for a doctor who talked about his portfolio, but Kim-Manzolini had always felt it was “over her head” and that she couldn’t afford to invest on her salary.

    “[Options trading] was intriguing because I didn’t have a lot of money, and it was really, really cheap,” Kim-Manzolini says. She began to research what it would take to get into options trading but was dismayed to discover that it would require a computer. She didn’t own or know how to use one at that point.

    But when she retired one year later, in December 2015, Kim-Manzolini needed a new way to sustain herself — she had no money in her checking or savings accounts, and it was too soon to touch the pension plan, 401k and other retirement accounts she’d built up over the past 33 years.

    I’d decided that I was going to study options trading — not knowing what kind of results I would get.

    So, in January 2016, when her husband returned to work and her son to school, Kim-Manzolini announced that she was getting to work as well.

    “My husband and my son said, ‘Huh, you just retired. What are you going to work for?’,” Kim-Manzolini says. “And I said, ‘I’m going downstairs to my office.’ I’d decided that I was going to study options trading — not knowing what kind of results I would get.”

    Kim-Manzolini taught herself how to use a computer and treated her options trading research “like it was [her] new job,” practicing Monday through Friday when the market was open from 7:30 a.m. to 2 p.m.

    By the end of that year, despite periods of “frustration” and “growing pains,” Kim-Manzolini had made roughly $100,000 with her practice account — and she was ready to try the real thing.

    “Of course, I still didn’t have any money,” Kim-Manzolini says. “I couldn’t touch any money, so I took out a home equity loan. Because you have to start somewhere. And I put it into my investment account, started investing and ended up making $178,000. I went over my goal, and I thought, Oh my gosh. I was shocked.”

    Image Credit: Courtesy of Sun Yong Kim-Manzolini

    Related: 50 Inspirational Quotes to Help You Achieve Your Goals

    “If you give up, then you will never find out how successful you could be.”

    Today, Kim-Manzolini, a grandmother of four, makes seven figures trading options.

    And she’s paying it forward by teaching other people, particularly single mothers, how to use her “unique miracle system” to trade options so they can spend less time working and more time on what matters most.

    “I thought, I’m going to teach this to single mothers so they no longer have to work six, seven days a week like [I did],” Kim-Manzolini says. “They no longer have to sacrifice their time; they get to watch their kids grow.”

    But anyone who aspires to financial freedom can learn from Kim-Manzolini.

    “[There are] people working nine to five for the corporate world who are overworked and underpaid,” Kim-Manzolini says. “They want to retire early. They don’t want to work forever — just like me.”

    Related: How to Make More Money in 2023, According to The FI Couple

    Kim-Manzolini credits her success to perseverance and the refusal to give in to fear.

    “[People] tell us some fearful things,” Kim-Manzolini says. “My kids [said], ‘Mom, you are good at medical assisting and love your job. Patients love you. Doctors love you. What are you going to do?’ And I said, ‘I don’t know. But I’m going to do something that I want to do that is not a pleasure. It’s my own time.’ [That requires] self-discipline and overcoming your fears.

    “Because a lot of us will stop when we [first] feel the fear,” Kim-Manzolini continues. “So one of the big takeaways is don’t ever give up — because if you give up, then you will never find out how successful you could be.”

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    Amanda Breen

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