asda sharescheme ? what should i do

loopy_lass

hi

im in my second year of asda share saver scheme, saving 20 a month, i know its not a lot but its all i can do. Anyway, im thinking is it best at the end to buy shares with the money or take the money?

I know its another 18months away but if im going to take the money i may take it now and start again next time round and use it as a saving account.

i know nothing about such things... loops

turbobob

Sharesave schemes normally give you an option to buy shares at a specific price at a certain point in future. The option price is set at the start of the scheme. This option can be valuable and allows you to benefit from possible increases in the company share price without any risk.

Whether you take the shares or the cash is dependant on whether the share price at the time of maturity is more or less than the option price.

To give an example, say you started a three year scheme and the option price was set at £1.00 per share. After three years, the company shares are now trading on the market at £2.00 per share. You decide to take the shares and exercise the option to buy them at £1.00 each. You can then immediately sell them at the current market price. You've just made a nice 100% profit.

If the option was set at £1.00 and after three years, the shares went down and were now trading at 50p, it would not be sensible to take the shares. You would in this case take the cash. In this instance you option was worthless but you would not have lost anything as you got your cash back.

loopy_lass

kool. thats good, i get it now, when i started the shares were 27p so i can buy at that, but i beleive they are worth more now, so thats good info thanks

loops

steveksullivan

Asda is owned by WalMart I believe ?

Whose shares are the option for ?

And when you say they were originally 27p was that the OPTION price or just the price they were trading at at the time?

loopy_lass

oh god, now your asking, i have no idea... do i need to? i seem to remember the word option being on the paper work

loops

turbobob

Probably more like £27 rather than pence In fact Walmart shares are traded in the US and therefore are priced in dollars, but don't worry about this too much. You can check the share price in dollars here - http://finance.yahoo.com/q?s=WMT but you'll have to convert to pounds..

Here is the Shareview site for Asda employees that explains fairly simply how it all works - http://www.shareview.co.uk/clients/asda/how_does.html

jenny2009

The Asda share scheme is as turbobob said but it is Walmart shares, these are priced in dollars and are currently $53.90 each

From 2006 to 2009 I saved £30 per month for 36 months which gave me £1080 plus a bonus.

The option price for me was £20.80 per share (converted from $s at a certain time) so I got 53 shares at £20.80 per share and sold them for £1562.89, a profit of £482.89 when the scheme matured.

Not bad for £30 per month for three years.

You have to wait for the scheme to mature the 3 years as the price of the share in $s varies and also the exchange rate between the £ and $ so until the actual end date you have no exact amount as to what the shares will be worth.

I was also saving in another 2 schemes but as I left Asda I had to cash them in.

If you ask your people manager in Asda to explain it to you I am sure he/she will.

Mine was very enthusiastic about it as he was putting in the maximum every month.

Jenny, a former Asda slave.

http://uk.finance.yahoo.com/q?s=wmt

loopy_lass

thanks yes your right it is wal mart and it is 27pound... but i have a year to go so ill keep saving, its only 20 a month but its all i can manage.

thanks loops