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Technology Stocks : Wind River going up, up, up!
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To: Starlight who wrote (7192)2/1/2000 8:30:00 PM
From: Don Lloyd  Read Replies (3) of 10309
 
Elizabeth -

[[...Why would someone exercise options if the stock were to DROP? Don't you exercise as the stock moves UP, thereby getting "cheap" stock which you hope will become even more "expensive" after you've acquired it?]]

The reason to exercise options BEFORE the stock is expected to DROP is to be able to immediately SELL the resulting stock and lock in the profit.

There is no reason, other than option expiration, to exercise the option on a rising stock as you are fully participating in the rise in stock value. The stock resulting from employee option exercises is almost always sold immediately as the option has all the potential gain of the stock, with less risk.

Regards, Don
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