I don't work for Google, nor do I own any Google stock, but I have been getting quite an education in stock options trading of late.

In short, if you have options valued at $36, that's really the "zero" point. [The brokerage] won't let me exercise my options until they're about 50 cents over the "zero" line, and even then that would bag me a whole $40. Not worth it. To get into "real money", our stock would need to hit $100/share. I don't expect that anytime soon. This leaves me with picking a good "strike price" to get a reasonable amount of dough as opposed to letting my options plain go to waste.

I don't know this for a fact, but I suspect that executive/officer options are valued much lower than mine, and thus are able to exercise them for a pretty penny whenever they choose, usually when resigning or retiring. Citizen Lunchmeat, indeed.

There are faster ways to lose money than work the options market - commodity futures. But not many.

Commodity options is about as ludricous as you can get. The problem is that the markets aren't necessarily liquid when you need them to be.

Stock option pricing is all about volatility. I am not a or your financial planner but if someone try's to sell you an option based on a Black-Scholes price - ask them if the volatilty of the underlying insturment is gaussian.

I have no sympathy for anyone losing money in any options market.

I have no trouble with Google people selling options, just don't expect me to buy them at any price.

From the NYTimes article:
"“If they can see what others would pay for them, then option valuation would become simple for employees.”"
A market price is a good price. But like I said above and Seth reffered to - what happens if the price of GOOG starts to change in a way outside the bounds of the implied volatility?

The answer is easy - somebody gets burnt.