| Topic Name: |
ACN Share Price |
| Message Name: |
ACN policy? |
| Date Posted: |
02/09/2006 |
| In Reply To: |
Buying a put option is fairly safe. But, with the stock around $32-33 using $30 puts like he's suggesting is expensive. You'll end up spending ~$2800 dollars to hedge a 1000 shares. That means the stock has to appreciate almost 9% just to cover the "insuance" cost. There are much better hedging strategies (lower strike price, delta hedging). But by far the best approach is simply diversifying your portfolio - or just live with the risk of the stock.
The other issue is the potential legal risk of getting hit with insider trading charges. The chances might be small but the risk is still there and the cost of defense (in addition to losing your job) probably are not worth protecting a couple grand on the stock. |
| Message: |
As I mentioned above, touching derivatives was expressly forbidden for employees as per policy.
Did this change? I don't think so - so all this hedging discussion would be moot.
Better look it up in the policy repository before you develop any elaborate schemes.
|
|
