| Topic Name: |
ACN Share Price |
| Message Name: |
Words mean things |
| Date Posted: |
02/08/2006 |
| In Reply To: |
I would think anyone (who is not an insider - meaning own 10% of outstanding shares) should be able to buy put options. Put options and derivatives are seperate things.
You are buying puts to protect your ACN stock investments. It may be illegal if you had some inside news (such as ACN manipulating earnings or losing a big contract), and than you go to buy LOTS of puts...
But if you are buying 10 put options to protect your 1000 ACN shares, I don't think SEC will come after you... |
| Message: |
Options are a form of derivative contract in legal terms, accounting rules and in reality.
Insider does not mean you own 10%+ of the company. It simply means you have information not publicly available. You can be an insider trader on a single share or with minimal gains. Ask Martha about that. I think her economic profit on the trade in question was under $25,000.
The problem is using puts to protect your investment creates a fairly large exposure that is probably not worth the risk (let alone the transaction costs). You're better off managing your risk through diversification.
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