Talk:Option (law)
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[edit] Difference from Real option
It's difficult for me to understand how what's described here is different from a real option. I suggest we consider merging this content into that page unless there really is some clear distinction. Ronnotel 14:21, 25 May 2007 (UTC)
- I think there is a difference between them; real option refers to a course of business which one can undertake whereas this article is concerned with a particular species of property right called an option. The option of the type described in real option is more akin to an "option" in a professional sportsplayers' contract which can either be exercised or not, but is not in itself a property right. The option described here refers to (for example) an option to buy land, which operates by way of conveyance and would be formalised in a separate deed from the main agreement and registered. This article is probably closer to option (film) than to real option. That said, all of the articles are similar, and probably could be merged into one single article under the heading option, but it would be difficult to include financial options in that article, although they too share attributes. But I am not opposed to it if someone wants to try. --Legis (talk - contributions) 15:42, 25 May 2007 (UTC)
- A single Option page was tried some time ago but there were just too many divergent viewpoints on what an option actually was - constant edit wars, don't want to back to that. However, I'm still a little stuck - while the Real option page leaves a lot to be desired, I think when one looks past the jargon, it really is the same concept as what you're describing - i.e. an option on a real asset, such as property. I'd like to encourage you to do consider incorporating this material. Ronnotel 15:48, 25 May 2007 (UTC)
- I'll take a look and see what I can do. I suspect that as you say the concept is so broad, it would be difficult to get an overarching article without serious edit wars breaking out, but perhaps we can do some cross-fertilising to try and rationalise the different articles a bit, then that might help. --Legis (talk - contributions) 17:22, 25 May 2007 (UTC)
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- I removed the 2nd sentence "The most frequent use of options relates to financial options, which, ironically, are never normally exercised by are traded or cashed on the basis of the difference in price between the time of granting and the time of notional exercise." which I didn't understand. Chiming in on the "Real option" question: 1) our real option article needs lots of work 2) A good article on options law would be much appreciated 3) options on real property (i.e. land) aren't the same as real options. "Real options" is more of a theory identified with Stewart Myers but also referred to in the original Black-Scholes paper, that says there are real world situations where the financial theory of choice (aka options theory) may apply, e.g. timing options (when to drill the oil well), expansion options (when to expand the factory), close down options (when to quit business and sell the trucks), etc. - any financial situation that involves a choice. It does sometimes seem a bit vague - what exactly is the strike price? what's the expiration date? what premium has been paid? But ultimately it has an important relation to corporate strategy. 4) Ronnotel is the best editor in Wikipedia on options related topics. He is right 99% of the time. Smallbones 09:22, 9 June 2007 (UTC)
- And Smallbones has absolute the best technique in all of WP for telling someone he is full of it. ;) Point taken. Ronnotel 12:10, 9 June 2007 (UTC)
- I'll try and put some kind of framework in that outlines that various different legal and commercial forms of options, and then hopefully that can allow editors with expertise in the various areas to plug in as appropriate. --Legis (talk - contribs) 13:02, 9 June 2007 (UTC)
- I removed the 2nd sentence "The most frequent use of options relates to financial options, which, ironically, are never normally exercised by are traded or cashed on the basis of the difference in price between the time of granting and the time of notional exercise." which I didn't understand. Chiming in on the "Real option" question: 1) our real option article needs lots of work 2) A good article on options law would be much appreciated 3) options on real property (i.e. land) aren't the same as real options. "Real options" is more of a theory identified with Stewart Myers but also referred to in the original Black-Scholes paper, that says there are real world situations where the financial theory of choice (aka options theory) may apply, e.g. timing options (when to drill the oil well), expansion options (when to expand the factory), close down options (when to quit business and sell the trucks), etc. - any financial situation that involves a choice. It does sometimes seem a bit vague - what exactly is the strike price? what's the expiration date? what premium has been paid? But ultimately it has an important relation to corporate strategy. 4) Ronnotel is the best editor in Wikipedia on options related topics. He is right 99% of the time. Smallbones 09:22, 9 June 2007 (UTC)
[edit] Merge with Option contract
It seems to me that these two articles are talking about two different aspects of the same thing, at least from a legal standpoint. I can understand why it would be good to have a different article for options as used in financial markets, but to have two different articles on options as they exist with respect to ordinary transactions seems a bit redundant. --Eastlaw 07:03, 30 September 2007 (UTC)
