Company Stocks

[JayGatsby]

Originally Posted by Lowexpectations

Typically these plans are funded by payroll deductions, if this is the case options really aren't helpful and there isn't a way to hedge out certainly not at a 2% cost/risk each option would run close to 4000.00

Mechanically it is pretty easy, if the OP buys 1000 shares at a 15% discount I think you'd just buy 10 puts and sell 10 calls at the money. Selling the calls should roughly offset the price of the puts so it should work... You wouldn't really have to do it all in the same account either, but you could run into a margin problem if the stock went too high.

[Lowexpectations]

Originally Posted by JayGatsby

Mechanically it is pretty easy, if the OP buys 1000 shares at a 15% discount I think you'd just buy 10 puts and sell 10 calls at the money. Selling the calls should roughly offset the price of the puts so it should work... You wouldn't really have to do it all in the same account either, but you could run into a margin problem if the stock went too high.

1000 shares is pushing 40,000.00, typically you can't just buy the shares all at once. Have you ever heard of these plans before? Maybe participated in one? Your idea doesn't work. This is how it typically works

Employee makes 100k and the plan limits you to 15% of comp
15,000/24= 625 or approx 16 shares per pay period.
You get the shares after one year at a weighted discount


Please explain how your idea works again? Hint: chances are it doesnt

[JayGatsby]

Originally Posted by Lowexpectations

1000 shares is pushing 40,000.00, typically you can't just buy the shares all at once. Have you ever heard of these plans before? Maybe participated in one? Your idea doesn't work. This is how it typically works

Employee makes 100k and the plan limits you to 15% of comp
15,000/24= 625 or approx 16 shares per pay period.
You get the shares after one year at a weighted discount


Please explain how your idea works again? Hint: chances are it doesnt

I'm not going to make any assumptions, if they op wants my help he/she can take the time to explain exactly how the benefit works.

[Lowexpectations]

Originally Posted by JayGatsby

I'm not going to make any assumptions, if they op wants my help he/she can take the time to explain exactly how the benefit works.

You made some assumptions with your arb and options trading