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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Valueman who wrote (26905)	4/13/1999 4:53:00 PM
From: gdichaz	Read Replies (1) \| Respond to of 152472

On a related option subject, about a year and a half ago I bought some Q and Loral January 2000 call LEAPS. Win a few, lose a few. Too early to act but trying to think through strategy. Will exercise some and sell some Would appreciate ideas as to whether to exercise those deepest in the money and sell those less deep or vice versa? Note: None of Loral in the money at this point, but who knows by next fall? Chaz

To: Valueman who wrote (26905)	4/13/1999 10:45:00 PM
From: JGoren	Respond to of 152472

Cisco poster is referring to stock options granted as employment benefit. For those, the difference between the exercise price and fair market value on the date of exercise, is ordinary income realized on the date of exercise. Aside from the fact that most employees have to borrow the money to exercise and don't have the financial wherewithal to hold, this is why most employees, when they exercise, immediately sell the shares in order to obtain the cash to repay the loan for the exercise price and pay their taxes. If they keep some shares, then the excess is capital gains--assuming the price increases before they sell. It also helps explain why top executives report on the proxy statement the difference between the exercise price and the price on the date of exercise as compensation.