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Unofficial(as in, one entity hedging for a separate entity) hedging is 1) illegal and 2) very inefficient and prone to screw you at tax time. But realistically
by module0000 9y ago
Unofficial(as in, one entity hedging for a separate entity) hedging is 1) illegal and 2) very inefficient and prone to screw you at tax time.
But realistically... you know non-wealthy stockholders(ie employees) want to cash in, so you buy into the retail sell-off on lockup day, bid it up 3 points, then close when you see the other retail buyers chasing the rally. Closing several thousand long shares should be sufficient to run their stops, depress the price, and present you with another buying opportunity at or near your original entry price.
All that said.. guessing what will happen with the market is how you lose your money, and fail at day trading before you ever got started.
- alasdair_ 9y agoIf, say, a person owns $5MM of snapchat stock and their spouse knows this, can their spouse (acting rationally) not simply short or buy a put option for some portion of this? They didn't agree to anything in the RSU agreement and no long as the spouse wasn't acting on insider information and simply wanted to hedge, I'm not certain a crime would have been committed, unless the person owning the shares actually asked their spouse to perform this action.
- module0000 9y agoOn paper: yes, that sounds good. BUT, if the SEC comes knocking...they operate in a way that looks like "guilty until proven innocent", and having your spouse do it appears at first glance as guilty. The RSU agreement would be important to see though, they may have some bits about spouses and immediate family - or they may not(in which case what you described is 100% above board). If anyone holding RSU's is (legally) able to show the RSU agreement, it would be insightful to read.