The Valrex model is an option pricing tool that can be used to measure the monetary value or worth of non-traded employee stock options and warrants. 

Non-traded employee stock options and warrants differ from traded stock options and require a different valuation tool than traded options.

How do traded options differ from non-traded employee stock options?

• Traded options have selling privileges: They can be sold and converted to cash quickly to hedge against future losses in the value of the options.  Therefore, traded options have liquidity value.


• Non-traded employee stock options usually have selling and hedging restrictions: They cannot be sold and converted to cash quickly, nor can they be fully hedged for their remaining term. These restrictions placed on employee stock options make them more risky and less valuable than otherwise identical employee stock options.  Valrex measures the value diminution caused by these restrictions.