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Knowledge Base

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John Olagues covers topics from the basics of employee stock options to advanced tax and hedging strategies.
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Knowledge Base

Three Risks in holding Employee Stock Options
1. The first risk is the risk that the stock...
(No rating) 1-30-2012 Views: 12

How to earn income from your Employee Stock Options
This article tells how to earn...
(No rating) 1-23-2012 Views: 27

Early exercise, sell and diversify is a flawed strategy
Here I show how early exercise, sell stock...
(No rating) 1-8-2012 Views: 29

How did Steve Jobs, John Chambers, Larry Ellison, James Dimon, and 135 Goldman Sachs executives handle their ESOs?
Why would the most noted CEOs in the...
(No rating) 1-25-2012 Views: 16

Five Golden Rules for Managing Employee Stock Options
The Five Golden Rules are:1. Don't exercise...
(No rating) 2-17-2006 Views: 6577

Archive of Newsletters
Archive of
(No rating) 3-23-2010 Views: 695

Dynamic Employee Stock Options
This article is about a new employee stock...
(No rating) 3-20-2011 Views: 306

John Olagues first and second interviewes by Kim Greenhouse on stock options
Kim Greenhouse of Los Angeles has just...
(No rating) 5-1-2011 Views: 252

Recent Articles on Executive Equity Compensation
SEC Waking Up
(No rating) 6-11-2011 Views: 437

How the values of ESOs increase when market volatility rises
Employee Stock Options can be conceived as...
(No rating) 9-27-2011 Views: 101

Advisers who advise early exercise, sell and diversify violate their fiduciary duties to their clients?.
Before we discuss the topic of this article...
(No rating) 9-28-2011 Views: 118

Does advising early exercises of ESOs, sell and diversify violate SEC Rule 10b-5?
Below is a copy of SEC Rule 10 b-5....
(No rating) 10-6-2011 Views: 113

Analysis of Strategies to Manage Employee Stock Options
The purpose of this article is to demonstrate...
(No rating) 11-19-2011 Views: 50

ISS and Olagues on hedging Equity Compensation
Here is an exchange of emails that went...
(No rating) 12-30-2011 Views: 38

Tax Advantages of "Qualified Covered Call" Writes
Holders of common stock of major companies...
(No rating) 6-25-2006 Views: 6041

Buying Google Put vertical spreads in your IRA to hedge stock held in your personal account.

(No rating) 1-7-2010 Views: 967

Why companies want premature exercises of Employee Stock Options
This article will illustrate why companies...
(No rating) 5-30-2010 Views: 509

Which Calls should I "write"
There are numbers of advisers who...
(No rating) 1-27-2005 Views: 9155

Are officers and directors required to report compensation income when they exercise employee stock options?
U.S.C. Title 26, Section 83 (c) (3) verbatim...
(No rating) 1-17-2011 Views: 430

You hold 20,000 Yahoo! ESOs and 10,000 shares of company stock. What should you do to reduce risk?
Lets suppose, in May 2003, you were granted...
(No rating) 5-2-2006 Views: 6984

Closer look at IRS Rule 1092, IRAs and ESO tax treatment
This is a discussion of the IRS Rule 1092...
(No rating) 2-17-2008 Views: 2919

If you hold Employee Stock Options and Employer Stock, you should write "Qualified Covered Calls" immediately.
Any holder of Employee Stock Options, who...
(No rating) 7-10-2006 Views: 9609

Graphical Illustrations of the Results of Premature Exercises of Employee Stock Options
These attached Bar Graphs illustrate how the...
(No rating) 4-22-2006 Views: 7109

Tax Treatment on Calls Written to Hedge ESOs
ï¿½1.There is no tax when the positions are...
(No rating) 4-6-2006 Views: 9232

The Tax "Straddle" Rule Sec. 1092 and the "Constructive Sale" Rule Sec. 1259 do not constrain hedging ESOs with listed calls
These tax laws apply to US citizens in the...
(No rating) 4-14-2006 Views: 11474

How much do ESO grants cost the company?
This article is about how much executive...
(No rating) 4-4-2010 Views: 645

Manipulation of Equity Compensation grants to executives may present a trading opportunity

(No rating) 11-5-2009 Views: 354

Employee Stock Options Hedging, SEC Rules and Taxes.
PreliminariesSome employees/executives desire...
(No rating) 1-22-2005 Views: 6937

Apple's Jobs Options activity analysed
Just recently there have been claims that...
(No rating) 12-30-2006 Views: 1769

Do Fiduciaries have a duty to recommend risk reducing hedging?

(No rating) 8-23-2010 Views: 438

Videos on Managing Executive Options Grants
...
(No rating) 4-9-2011 Views: 181

Risks of Holding ESOs
This article is about something that seems to...
(No rating) 3-24-2009 Views: 211

Sell calls to hedge your employee stock options and deposit the proceeds into an IRA
Assumptions:Suppose you own Employee Stock...
(No rating) 8-18-2007 Views: 1860

Higher implied volatilities encourages Hedging ESOs instead of Premature Exercises and Sales
In the past several months since June 2007 we...
(No rating) 8-22-2007 Views: 1584

How Steve Jobs managed his Employee Stock Options.
Attached is a copy of a Form 4 required by...
(No rating) 8-17-2007 Views: 1877

Hedge your ESOs and get Special Tax Benefits
The purpose of this article is to prove that...
(No rating) 9-7-2007 Views: 1842

The mechanics of Short Selling stock and Selling Listed Calls
In this article I will explain how short...
(No rating) 9-18-2007 Views: 2220

Federal Courts Favor Back Daters in 16b cases
In 1934, the Congress passed a law trying to...
(No rating) 9-1-2007 Views: 1269

How Much does an Employee Throw Away by Making Early Exercises of ESOs
In many of my articles I advise employees to...
(No rating) 8-15-2007 Views: 1632

Using IRAs to Manage Your Employee Stock Options
Most advisers claim that you need extra cash...
(No rating) 5-24-2007 Views: 1947

An Early Exercise of ESOs is Worse than an Early Withdrawal from a Traditional IRA.
For Example Google Options : Assume that a...
(No rating) 5-5-2007 Views: 1837

Google Transferables Revisited and Updated
Since my earlier article on the Google...
(No rating) 5-2-2007 Views: 1703

Some advisors say Optionees are prohibited from hedging their Employee Stock Options.
Many Advisors to optionees claim that...
(No rating) 5-7-2007 Views: 3010

How to Handle Your Apple Equity Compensation .
Assumptions:Let's suppose that you had been...
(No rating) 4-27-2007 Views: 2068

Disguised Re-loading of Executive Stock Options
Until just recently, I was puzzeled as to why...
(No rating) 11-26-2006 Views: 4987

Mr. Lucky goes to Yahoo
We will call him Mr. "Lucky"We are...
(No rating) 6-25-2006 Views: 1415

Does Hedging ESOs Defeat the Purpose of the Options Grant?
Whenever I speak with a person who has...
(No rating) 1-8-2006 Views: 5214

Buying Puts to Hedge ESOs can be used to Reduce Risks but Often Increases Risks
Some advisors claim that one easy way to...
(No rating) 12-23-2005 Views: 4503

Why Advisors do not Recommend Hedging Employee Stock Options
To any informed trader of stock options, it...
(No rating) 10-4-2005 Views: 2330

How to recognize when executives are trading with inside Information
Let's assume that you hold sustantial...
(No rating) 10-2-2005 Views: 2901

Are Executives Prohibited from Hedging their Stock Options
There are many articles that contend that...
(No rating) 8-19-2005 Views: 2823

Negotiating for Equity Compensation
This article advises employee/executives on...
(No rating) 8-9-2005 Views: 4315

My options' exercise price is 50 and my stock's at 85. What do I do?
Many of the 11 million American employees...
(No rating) 7-17-2005 Views: 4876

Allowing and promoting hedging of ESOs increase their perceived value
The vast majority of employees holding stock...
(No rating) 5-6-2005 Views: 2468

Analysis of a Hedge against Google Employee Stock Options
Assumptions1. Assume that Google common stock...
(No rating) 2-7-2005 Views: 3927

Comparing Restricted Stock to Employee Stock Options
There has been much discussion claiming the...
(No rating) 6-19-2002 Views: 5499

Exactly How to Manage Your Employee Stock Options
The Objects of this article are..To create a...
(No rating) 1-23-2005 Views: 4677

Chance of Employee Stock Options Being Worthless at Expiration
The matrix below illustrates the probabilities...
(No rating) 1-19-2005 Views: 2971

How to Calculate the Value of Your Employee Stock Options
Employees are often faced with the task of...
(No rating) 1-19-2005 Views: 4956

Premature Exercising ESOs Forfeits Part of Your Compensation Back to the Company
The predominant strategy that "Options...
(No rating) 1-19-2005 Views: 2150

Youtube Videos on Hedging employee Stock Options
Check out these Youtube videos on Hedging...
(No rating) 12-31-2009 Views: 691

Further Explanations of Taxes and Options
Assumptions:Assume that an investor sells 10...
(No rating) 10-2-2007 Views: 1548

When to exercise and when to hedge your employee stock options.
The answer to that question is not easy. In my...
(No rating) 1-1-2006 Views: 5748

New Book on Employees Stock Options
New Book on ESOs by John Olagues and John Summa...
(No rating) 1-15-2010 Views: 593

Videos Explaining Options, and hedging employee stock options
Here are three videos which are essential to...
(No rating) 1-24-2011 Views: 324

Google Transferable Employee Stock Options
On December 12, 2006, Google announced a plan...
(No rating) 12-15-2006 Views: 4895

Book Review by Bruce Brumberg
An Amazon Book Review by Bruce
(No rating) 8-21-2010 Views: 382

Slidecast of hedging ESOs
These slidecasts are by John Olagues on...
(No rating) 12-13-2009 Views: 624

Taxes on Hedging Stock and Options Slide Presentation
Here is a presentation (linked below) of...
(No rating) 1-17-2010 Views: 597

Investopedia Articles by John Olagues
Here are a few articles that I have written...
(No rating) 1-15-2010 Views: 643

Live Webcast on hedging ESOs recorded 12/17/2009
Dear Visitors:If you wish to view the webcast...
(No rating) 12-23-2009 Views: 577

Buying Puts to Hedge Employee Stock Options or Long Stock has unique Tax Advantages
Assume that an employee was granted 1000 ESOs...
(No rating) 3-10-2008 Views: 3687

How a Professional Market Maker would Manage his Employee stock options
Attached is a Comprehensive Article by John...
(No rating) 12-31-2007 Views: 1512

White Paper on Managing Equity Compensation
See Attached White Paper
(No rating) 4-16-2006 Views: 4809

Letters to SEC and IRS seeking determinations
These attached letters seek determinations from...
(No rating) 3-10-2006 Views: 572

Strange Calculations in Google Options Expenses.
On page 91 of Google's 10-K Annual Report...
(No rating) 5-20-2007 Views: 2071

Profits from your Employee Stock Options can be Tax Free
Yes, you can turn otherwise ordinary income...
(No rating) 2-19-2007 Views: 1640

Naked Short Selling of Stock
Every trader or holder of equities should...
(No rating) 12-26-2006 Views: 2153

Focus on SEC Rule 16b-3(d)(3)
There is much news these days about options...
(No rating) 11-12-2006 Views: 434

Back -Dating, Spring-Loading and other Executive Scams
At cocktail parties in Silicon Valley and on...
(No rating) 9-15-2006 Views: 5191

Volatility: What does it mean and how do you calculate it?
Volatility is the annualized standard...
(No rating) 6-14-2006 Views: 2814

Can you legally sell "naked" calls in an IRA plan?
There is absolutely no IRS or other legal...
(No rating) 6-25-2006 Views: 5760

Using Listed Options on Positively Correlated Stock to Hedge Employee Stock and ESOs
Sometimes employers decide to prohibit hedging...
(No rating) 9-29-2005 Views: 1850

Exercising ESOs and Diversifying has its Costs.
"Diversify, Diversify, otherwise you'll...
(No rating) 7-25-2005 Views: 4203

Comparing options grants to cash compensation
Myth:A myth has been promoted that executives...
(No rating) 8-22-2005 Views: 3830

Premature Exercising ESOs Forfeits "Time Premium" Back to Employer - Short Version
When ESOs are granted, the entire value...
(No rating) 7-15-2005 Views: 4082

Delay the exercise of your employee stock options and make an extra 50%.
DELAY THE EXERCISE It’s estimated that 10...
(No rating) 1-19-2005 Views: 5851

Expensing Employee Stock Options
Companies are required to expense the...
(No rating) 1-19-2005 Views: 5508

John and his Optionettes
Please see attachment showing John with his two...
(No rating) 12-30-2006 Views: 2305

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