Overview

Any delay in liquidation, caused by regulatory restraint (marketability), or lack of buyers at the current price (illiquidity) creates price risk for the holder. This price risk results in a lower price offered for stocks subject to a delayed liquidation. Larger blocks require longer periods to liquidate and are likely to incur significant blockage discounts.

Optionmodeldlom provides a cloud-based DLOM utility for professionals who must quantify illiquidity in private interests and restricted securities—accurately, defensibly, and efficiently. Minimal resource commitment with no database download, no program installation, or maintenance.

The platform combines real market empirical datasets, multi-model engines (Three option-pricing models), and automated, audit-ready documentation. It reduces cycle time for valuations by 40–70%, improves defensibility, and enables scalable adoption through role-based access and simple pricing.

You have a choice of benchmarking Blockage and DLOM (Transfer Restrictions) discounts using peer group portfolios constructed across market value deciles, SIC code groups, and an intersection of industry and size portfolios. Alternatively, you can get granular ticker-based estimates for Blockage and DLOM discounts for individual market traded stocks.

Using the Calculator

Using the calculator is simple. Select the appropriate option:

Benchmarking portfolio results are presented for each of the exchange option models. Please select the appropriate model based on the buyer/seller combination.

Exchange Option Models

Results for each model are presented in a 3X3 matrix with nine values of estimated discounts, one for each of the volatility (low, median, high) estimates for each of the liquidity (low, median, high) estimates. Please select the appropriate combination of volatility and liquidity for the selected model.

Ticker level discounts are based on applicable individual stock volatility and liquidity estimates for the ticker at the end of the specified year-month and the block size.

Theoretical Foundation

The exchange options-based models rest on well-established theory and use real market data. The results are transparent and replicable, making them defensible. Complete compliance/litigation work files can be generated with underlying data, model selection criteria, calculation steps, and results fully annotated.

Applicability Across Primary User Segments

Valuation professionals, accounting/tax professionals, and legal professionals.

Business Problem & Solution

Core Value Proposition

• Accuracy & Defensibility: Standardized methods, transparent assumptions, citations, and detailed audit trails.
• Speed & Scalability: Templates, batch processing, and API integrations cut analysis time drastically.
• Consistency Across Teams: Firm-wide templates and locked methodologies reduce variance and reviewer friction.
• Compliance Alignment: Outputs aligned with USPAP/AICPA/ASC 820/IFRS 13 documentation expectations.
• Collaboration: Cloud-based roles, sharing, and version control for multidisciplinary teams (valuation, tax, legal).

Feature Recommendations by Segment