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So, most FAANG employees are not allowed to trade in derivates that short sell their own stock, which I figure is half insider trading protection and half ensur
by jldugger 6y ago
So, most FAANG employees are not allowed to trade in derivates that short sell their own stock, which I figure is half insider trading protection and half ensuring equity compensation actually works.
However, I've often wondered if those employees could still offload some of the assumed risk of portfolio concentration by investing their free investable cash in, say, their own SP499: every company in the SP500 except the one they work for. Though I suppose you'd have to have a pretty big net worth to fully offset unvested shares this way.
- toast0 6y agoI agree, an S&P499 could be pretty handy, especially for people with ISOs instead of RSUs. It's generally pretty simple to sell RSUs when they vest and diversify, but ISOs are more complex. If you can avoid realizing some of the gain, while ending up with S&P 500 equivalent holdings, that would be neat. Of course, that would still be selling most of it.
- kmckiern 6y agoWe have a handful of users with this exact use case!
- jldugger 6y agoHonestly the reason I haven't pulled the trigger on this myself isn't the automation, but because managing the dividend reinvestment transactions come tax time would be absurdly time consuming.