John Olagues

After getting his B.A. in math from Tulane University, where he captained the baseball team and set most of the pitching records, John later moved to San Francisco and became an options market maker on the Pacific Stock Exchange in 1976. While there for 5 years he held the largest positions and traded more volume than any other market maker. Together with Blair Hull he founded Options Research, the first service to supply theoretical options values to market makers and the public.

In 1980 he moved to Chicago and became an options market maker on the CBOE, the largest options trading floor in the world. For 5 years, he probably traded more options in more diverse circumstances than any other market maker who walked on the floor.

As a market maker, he and his associates created most of the hedging strategies used today by professionals traders.

In 2003, John founded Truth in Options advising holders of employee stock options on how best to manage their grants of equity compensation. He discovered that there is virtually no one in the ESO arena that advises hedging as a risk reducing, value enhancing strategy. His mission was and is to apply his extensive trading and hedging experience with exchange traded options to the ESO arena.

In 2009 with John Summa, he wrote his first book, Getting Started in Employee Stock Options, published by Wiley and Sons.

This book is essentially about how to apply the principles and strategies that options market makers would apply to manage their portfolio of employee stock options that they were granted by their employers. It is not, however, only to be used by professional traders as anyone can apply the principals to his/her ESO portfolio regardless how small. The book is for anyone who has employee stock options or advises others who have employee stock options regardless of how un-experienced in options they may be.

Essentially, the book explains how to reduce risk, increase your after tax earnings and maintain the alignment of interests between the employee and the company for a longer time. Premature exercises, sales and diversifying is far overrated and eliminates the mutual alignment far earlier that hedging strategies.

The strategy is applied through the use of exchange traded calls and puts executed on major exchanges to hedge the employee stock options so that you can avoid the costly premature exercises and selling the stock. The early exercise and sell strategy forfeits part of the value back to the company and causes an early compensation tax. The premature exercise is generally advised by the wealth managers, so called options experts, and the companies themselves because they benefit from the premature exercise strategy at the expense of the employee.

This is the only Stock Options book endorsed by some of the world's foremost options academics and exchanged hardened traders and focuses on what is best for the employee not the wealth manager or the company/employer.

Hope you find it helpful.

John Olagues

504-875-4825

www.optionsforemployees.com/articles

If you have ESOs and need help managing them, call for a free initial consultation.