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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: dougSF30 who wrote (220210)	12/12/2006 11:51:12 PM
From: Sarmad Y. Hermiz	Read Replies (1) \| Respond to of 275872

>> As it should not. I think I've already told you that any intelligent analysis of insider holdings must include options. Doug, I think the exercise of options that are in the money triggers a tax liability to the person exercising. Is that correct ? I also think the tax liability is on the gain, which is the difference between the exercise price and current price. I am not sure about this, but it seems reasonable. And that gain is taxed at wage rates. So, the very best time (least tax liability) to exercise options is when the stock price is as low as possible. If executives are exercising now, and keeping the shares, it means they think this is a bottom, and they expect the price to go up It doesn't mean their guess is better than anyone else's. But that is how they are betting.