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Strategies & Market Trends : Picks of the quarter
ATHR 6.095+2.6%Jan 7 3:59 PM EST

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To: Elroy who wrote (2438)1/18/2007 8:13:33 PM
From: Sr K   of 20435
 
The cost is the option cost including commission plus the stock cost including commission or fee to exercise the option, and the holding period restarts on the option expiration date.

It would be slightly different for a LEAP held more than one year before exercise. But exercise is not a taxable event.

If you sell at a gain ($14 or so per share now) on 12/17/2007 or later, you will recognize a long-term capital gain, if the sale proceeds exceed the options cost plus the exercise price and any fee your broker charges to exercise that option, because the options in 12/2006 expired on 12/15/2006 and the first trading day a year and a day later is Monday, 12/17/2007.
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