Insider trading options exercise

Ex Insider Trading Policy


insider trading options exercise

This article offers a primer on the rules that govern insider trading. It focuses on a common insider’s mechanism, namely stock options. While I make no claim to be an expert on this, I was an officer for a few years at a company that was private and went public, but that was in , so a few rules may have changed since then. Long and Short Trading Ideas using Insider Transaction exercise stock options means that you choose to buy or sell the stock. Some companies give their employees stock options: the option to buy company stock at a specified price. insider trading implications of an insider exercising her stock options. The time is ripe for this discussion, particularly sin ce the SEC and Department of Justice have ambitiously prioritized insider trading enforcement of late. Picture this: As a valued contributor to a public company, you received stock option grants over several years.

Insider Trading - Investment FAQ

American Realty Capital Properties the benefit of the doubt after its accounting bomb was dropped earlier this week. Let me let you in on a little secret: Not all insider trades are created equal. It's very easy to look at the wrong kind of trade and draw the wrong conclusion.

Let's take a look at the insider in question, Lisa McAlister. She was the Chief Accounting Officer--and presumably the person directly responsible for insider trading options exercise accounting misstatement. The timing of her sale--Oct insider trading options exercise particular suspicious considering that was the day the scandal broke. Here's the story. She didn't actually sell her stock. These were restricted shares issued as stock-based compensation that had to be forfeited after her resignation.

It's really not newsworthy when a company insider exercises stock options or acquires restricted stock as part of their executive pay. This is not really "buying" or "selling," and it doesn't give us any real information. Any smart insider will, for tax reasons, immediately sell stock that they acquire from the exercise of options. So if you look at the stock sales in a vaccuum, you might draw the conclusion that the insider is unloading shares in anticipation of bad results when he or she is really just doing some tax and portfolio housecleaning.

The insider trading that actually matters are buys and sells in the open market, insider trading options exercise. These are discretionary trades made by the insider based on their own assessment of the stock's value.

This isn't CEO cheerleading; it's putting their real money on the line. Numerous sites provide free or very cheap data on insider sales, insider trading options exercise, including heavyweights like Yahoo Finance. But the problem with Yahoo's data is that they list everything, including meaningless transactions such as the exercise of options.

So if you're getting your data from a mainstream source like Yahoo, make sure you pay close attention to the buys and sells in question to determine what kind of trading it really is, insider trading options exercise.

My favorite source for insider trading information is GuruFocus. GuruFocus strips out the meaningless transactions and leaves you with the real meat.

The insider buying table you see in my original article came directly from GuruFocus insider trading options exercise. I manage client accounts via my firm, Sizemore Capital Management. Read More.


When Insiders Buy Should Investors Join Them?


insider trading options exercise


Dec 09,  · Maybe. Yet the literature is surprisingly scant concerning the potential insider trading implications of an insider exercising her stock options. The time is ripe for this discussion, particularly since the SEC and Department of Justice have ambitiously prioritized insider trading enforcement of . If you exercise stock options when you know secret stock-price-moving information about your company, the exercise itself is not a violation, according to most experts. However, selling the stock at exercise, as in a cashless exercise/same-day sale, when you know confidential information about the company would almost certainly be considered insider trading. Compared with ordinary exchange-traded options that are generally exercised at expiration, employee stock options have several features that make the option exercise decision more complicated. In particular, employee stock options are non-transferable, .