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Re:TLDR Stock Options by logfromblammo on Monday March 04, 2019 @03:01PM (#19304766)
A reasonable person would take the lottery ticket and immediately offer to sell it back to the issuer--or to a large insurer or casino--for a guaranteed $50k (negotiable) before the drawing occurs.

However, some options grants are not transferable in that fashion.

The reasonable person can then calculate the range of payouts for each option as [$1k..$1k], ev $1k, for the cash option, and [$0..$1M], ev $100k, for the gambling option. Not all gamblers only use expected value as their only metric. Some people also use the minimum return. Those people would take the guaranteed $1k, in cash, and walk.

Even if the gambling option had a minimum payout of $1000, thus making it the strictly superior option on paper, just by those metrics, it might also only pay off 3 days from now, when the $1000 on the spot, could be used right now, possibly in some other psychologist's thought experiment on gambling behaviors.

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