When is the right time to sell stock options

5 Tips On When To Sell Your Stock

 

when is the right time to sell stock options

Mar 13,  · However, if you exercise the options and hold the stock for more than a year (and 2 years from when the options were first granted to you), then when you eventually sell the stock Author: Erik Carter. Dec 20,  · So when is the best time to sell call options? Since income is the primary objective of this strategy, you should start by looking at what changes the value of call options Author: Greg Group. You will owe no taxes at the time of exercise if you exercise your stock options when their fair market value is equal to their exercise price and you file a form 83(b) election on time. Any future appreciation will be taxed at long-term capital gains rates if you hold your stock for more than one year post exercise and two years post date-of-grant before selling.


When should I sell my stock options? | Real Finance Guy


Stock Options When is the best time to sell my stock? As many of you know, I work for a late stage venture backed startup. Last week, my company raised a large new financing round at a lofty new valuation. Since I joined two years ago, my shares have appreciated by over 10x. Although this new round values the company aggressively, I also believe that we have the potential to significantly outgrow this newest valuation within the next years.

This means that if I sell now, I might miss out on bigger gains down the road. Last year, when is the right time to sell stock options, I told the story of my own stock option sale, and the difficult lessons I learned from not selling my stock when I had the opportunity.

So, do I sell my stock options? And if so, how many? The only way to take money off the table while maximizing my potential gain is to sell a small amount at periodic intervals: dollar cost averagingbasically. The way that I do that is simple.

I make a straight line from whatever the current price is, to the price that I expect it to be at in 4 years. But how do I determine what I expect the price to be? Extrapolating what the price could be in the future is difficult. One way I simplify this for myself is by asking what a good outcome when is the right time to sell stock options be.

What is a reasonable price for this asset, a price that I would be happy with 4 years down the line? Obviously, my expectations for my current organization are quite bullish, given that I think it will 10x within 4 years. Whatever the number I choose, the most important thing is that When is the right time to sell stock options am honest with myself. Step 2: Start selling when I can After drawing a line from the present value to the future, my expectations are very clearly established.

At any given moment, I can look at my chart and know whether the current price meets, exceeds, or fails to reach my expectations. In other words, I am way above my expected value, which means that I should sell at least some of what I have. Unfortunately, selling can be a challenge. There are additional lockup periods once the company is public leading up to and after earnings releases this is to prevent insider trading. Whether I am done vesting, when is the right time to sell stock options, or I have significantly more shares to vest, I determine what I sell based on what I have already vested.

Step 3: Sell high! Every once in a while, things work out better than expected and the price of my stock is significantly above my expectations line. This is probably a good thing, since I expect the stock to continue appreciating over time.

The image below from my Personal Capital vesting schedule shows the total number of shares I have available to exercise, which is a relatively small portion of my total.

 

 

when is the right time to sell stock options

 

Dec 20,  · So when is the best time to sell call options? Since income is the primary objective of this strategy, you should start by looking at what changes the value of call options Author: Greg Group. Mar 13,  · However, if you exercise the options and hold the stock for more than a year (and 2 years from when the options were first granted to you), then when you eventually sell the stock Author: Erik Carter. Last year, I told the story of my own stock option sale, and the lessons I learned from it. This week I am confronted with an opportunity to sell shares in my current company, so I finally have the opportunity to put those lessons to use. But, I am still wondering if I should sell my stock now, orAuthor: Real Finance Guy.