When dealing with option valuation, you should always remember is that an option always has value until it is exercised or expires. And, more importantly, an option can never have a negative value. COVID-19 lockdowns and the resulting economic uncertainty have affected many colleges and universities. In August, a top private university offered its faculty members over 70 a chance to accept a buyout if they retire by June 2021. In response, the faculty responded negatively to the buyout plan, essentially arguing against being offered something of value, the option to retire with a buyout, for nothing.
