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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Sonki who wrote (18471)	5/24/1998 4:34:00 PM
From: AlienTech	Respond to of 50167

>>employees who are granted stock options are NOT allowed to short the company stock<< Thats is not entirely correct. Stock options are like bonuses and hence they fall under employee compensation for tax purposes. There is no shorting the box here, But you can short an equal amount of shares if you have the money in your brokers account to lock in your gains or losses. There are also crooks I mean companies which will do this for you for a price. IE if you have 1000 shares which becomes vested in an year and the current price is 100, they will give you 50 for your shares now. They are taking a big risk that you will still be there an year from now and that they can get their money from you in case you left before hand. Unless you end up in jail and need money for bail anything like this is a last resort. The shorting works out as you will get 1000 shares in time and the price currently is 100, You short the shares which requires a margin of 50000, Later on you sell your options and cover your short and pay taxes and end up with a gain of 50000 or so. A lot of others factors like your vesting price, the tax bracket etc will play in this so if your vesting price is 50, its pointless to short your options this way.

To: Sonki who wrote (18471)	5/24/1998 11:41:00 PM
From: Tom Trader	Read Replies (2) \| Respond to of 50167

>>employees who are granted stock options are NOT allowed to short the company stock<< I agree with AT -- I don't believe that there is any blanket prohibition as far as shorting a stock irrespective of whether one receives options--unless of course a company has a policy that specifically prohibits this from being done. More to the point is the fact that if one is an insider, this would have to be identified and disclosed--and would not exactly inspire confidence in the investment community. In any event, irrespective of whether or not corporate policy prohibits it, it would not be very smart politically to be shorting the stock of one's employer--lest this becomes known--even if one were not an insider.