Re: [CANSLIM] USLB

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] USLB
Date: Thu, 2 May 2002 22:01:12 -0400

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employee options do not trade, they can't be sold. They are not like options
issued by traders at CBOE (and other places)

companies will often even loan the employee the money to exercise the
options, contingent on immediate repayment when the stock is sold. Since any
gain is immediately taxable, very few executives want to be out actual cash,
so they will almost always exercise, and immediately sell at least enough
shares to pay for the cost of exercising, and any taxes.

Tom Worley
stkguru@bellsouth.net
AIM: TexWorley
- ----- Original Message -----
From: <Spencer48@aol.com>
To: <canslim@lists.xmission.com>
Sent: Thursday, May 02, 2002 9:26 PM
Subject: Re: [CANSLIM] USLB


Tom:

     As I understand it, "in the money options" mean that the options are
higher than the striking price.  And deep in the money-I presume-would mean
that the options are a lot higher than the striking price.

     If this is so, and the options are about to expire, than why don't the
option-owners exercise them (ie. sell them)?

jans



In a message dated 5/2/2002 8:53:33 PM Eastern Daylight Time,
stkguru@bellsouth.net writes:

<< Why would an insider sell if he thinks things are going great and will
get
 better? Because often their entire net worth is tied up in one company, and
 they need to diversify. Also, they may have options about to expire that
are
 deep in the money. Can't just exercise the options, need to sell stock to
 pay the immediately due tax bill.  >>

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