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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Hawkmoon who wrote (2265)	11/17/1999 12:16:00 PM
From: Enigma	Read Replies (1) of 3536

When the options were granted surely the market price was around $17 - in Canada at any rate there are rules about this. Where is the violation of GAAP? What is the tax deduction not charged against earnings? In Canada if one exercises an option one has a taxable benefit = the market price at the close less the exercise price - so the employee would have income of $90 - $17 = $73 per Share. So here at any rate you find most people sell on the day they exercise the option - because they want to make sure their tax liability is covered should the price fall. If a company is subject to SEC rules I believe the person exercising the option has to hold the shares for a year - which in this volatile market is hair raising.

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