in the past, i avoided my current employer's stock option in open public market (here i am talking about derivative call/put option trading on open market on my private investment brokerage account not employee stock options (although they actual have some resemblance in terms of hedgin). Well my current employer is a slow growth or no growth these years and also expected to be not a growth stock at all next few years, plus employer rule prohibited our employees from trading its stock in the open market using call/put options. That is understandable as it can possibly be a considered insider trading. Now I am interviewing for ultra-high growth tech company that I have been eyeing for quite some time and entering the final stage. The problem, last few years has been a blast for this company and stock is rocketed to sky and my current naked call is about 800% in a year. The problem is if i get hired, and continue to trade my now employer's new stock call/put options in the open market, then the issue of insider trading comes into focus. With my current employer it is no concern as I did not bother with it all due to stagnant growth as I mentioned above. So I am sort of perplexed about what i should do. Certainly, they will likely to grant me a employee based stock options plan (which is somewhat quite safer than going almost bindle in the open market) but the problem is contribution limit. I am very bullish about this company and was planning to trader tens of thousands of dollars in the next few years which will be problematic if I get hired. One option is not to get hired and continue trading in the open market but then it is also a forgone great opportunity in terms of career. ??? What should i do ??? Does this insider trading rule is designed by company rule and varies company to company or is it enforced by SEC. If it is enforced by a spec, is there any exemptions and/or rules/requirements that I can follow and satisfy so that I can continue trading without being considered insider trading. Obvously last think I would do is get into legal problem in regards to this. Thanks.,
There seems to be some good source of information here: https://www.sec.gov/fast-answers/answersinsiderhtm.html
I'm guessing that you work for a semiconductor company such as Qualcomm or Intel? In any case, it's odd that your company prohibits trading via options. Don't see how it's much different than trading the stock with the exception of the leverage. Most companies encourage their employees to buy the company stock. At work, the slot machines in the cafeteria even accept company stock as payment. In any case, if I were you I would take the job at the good company and leave the crappy one and continue holding the options. If the SEC ever takes issue with it, you can show them that you owned the options before you joined the company. Remember that they still have to prove you traded based on insider information. If you or anyone else ever comes across information and you're not sure if it's insider information or not, tell me about it and I'll let you know if it is or not.
why dont you ask the new HR for their policy manuals and review them? then determine with certainty what they are stating about it in terms of policy as to what is permitted or not... outside of that, its a matter of subjectivity...
Congratulations on your great call trade. I've replied to a similar question in the past with my tale of a previous employer who was asked to turn over all names/numbers of employees in connection with suspected insider trading. From there, it should not be hard for them to obtain your trading records by poking your broker. The IRS knows where you bank and can see the money going back and forth from there. If you are working at the company and not allowed to trade at the levels you wish, the only thing you can really do is try to find a fund that trades your company as one of its top holdings. It would not be illegal to hold that, but it might not be very satisfying, either.
Most company policy don't allow especially if you are holding a position with some responsibility. Even if this one allows, it is still not a good idea to trade in the open market, from both ethic and legal grounds. Too easy to get into trouble. Besides, such high growth tech company generally gives out lots of stock options so if you hold any position with some responsibility you will be awarded enough options you really don't need to play the market. There are enough other high growth tech companies out there for you to apply your talent in trading and make money, so you don't have to trade with or against your own company. Regards,
I think it would be pretty hard to profit by trading via a fund. Funds don't typically hold more than a few percent of any given stock.
Actually, if you own a lot of stock options in the same high growth company that you work for, you simply have a LOT of risk related to that company. You got all your eggs in one basket. That's the classic and most sensible case for hedging.