Confirm Action

Are you sure you wish to do this?

Confirm Cancel
Member Login
Site Notices
1/25/2018 7:38:29 AM
Posted: 2/21/2006 3:26:48 AM EST
[Last Edit: 2/21/2006 3:29:25 AM EST by jthuang]
Any recommendations on reading which could edumacate me on how/when to exercise stock options?

I am generally familiar with stock options. I know how they work and I'm even familiar with the Black-Scholes pricing model from my days in college.

My employer gives us some stock options every year, which vest in 3 years and expire in 10 years. This is probably the first year (I've only been here 4 years) that I have some options that are above water, and for a decent amount of change.

From what I've gleaned so far, it is advantageous (from a tax perspective) to put off exercise as long as possible. This is due to the value obtained from deferring the taxes paid on gains incurred when exercising the options. That assumes, however, that the company's stock price remains at a sufficiently high level such that the options remain above water over time.

Thanks in advance!

PS: I have no debt (other than my mortgage), I max out my 401k every year, I don't qualify for a Roth IRA, I have a 6 month expense "emergency fund" and I have significant after-tax investments (mutual funds). I have no spouse, no kids, no dependents. No car either, but I don't need one. I'd like to get a motorcycle, but that's a thread for a different time.
Link Posted: 2/21/2006 12:29:26 PM EST
Link Posted: 2/21/2006 1:00:11 PM EST
Sounds like you are doing better that most people...definately better than I am so I can't help you with your options. I did work at a company that offered options but left before I was vested. I do remember some issue about the taxes but obviously never went through it. Good luck with it.
Link Posted: 2/21/2006 1:15:50 PM EST
I do not know any books, you might post this in the Business&investing forum here.
Link Posted: 2/22/2006 3:57:34 AM EST
True, I forgot there was a Business forum. Thx.
Link Posted: 2/22/2006 3:59:10 AM EST
Stock Options?

A1 A2 Voltor CAR ...... You should find some info in the AR forums......

Link Posted: 2/22/2006 4:05:40 AM EST
• Bond Portfolio Management, (Second Edition), 2001, by Fabozzi, F.J., editor,
• Investments, (Sixth Edition), 2005, by Bodie, Z., Kane, A., and Marcus, A.,
• Financial Economics, 1998, by Panjer, H.H., editor,
• Handbook of Fixed Income Securities, (Sixth Edition), 2000, by Fabozzi, F.J.,
• Managing Investment Portfolios, (Second Edition), 1990, by Maginn, J.L., and Tuttle, D.L.,
• Valuation of Interest-Sensitive Financial Instruments, (Second Printing),1996, by Babbel, D. and
Merrill, C.,
Top Top