Posts filed under “Options”

Good News on Stock Options & AMT

If you received and exercised stock options, and had to pay taxes on the phantom income, I have got some good news for you:

Buried in the $700b TARP Bailout is this AMT tax amendment:

“Their tax nightmare was created by a provision of the Internal Revenue Code called the Alternative Minimum Tax, or AMT. These tech workers had been granted what’s called an incentive stock option. Under the AMT, these are taxed at the time employees exercise the right to buy them, based on the difference between the grant price and the exercise price. During the dot-com era, when stock prices soared to dizzying heights, employees could have a stock option that was granted at less than a dollar but that he or she exercised at more than $100 a share.”

Granted, this applies to a relatively small pool of employees nationwide — those people who benefit recieve some form of compensation in the form of stock options.

We shall assume that some measure of relief will find its way to the various Wall Street denizens of Bear Stearns, Lehman Brothers, and anyone else who paid income tax on exercised stock that is now worthless — or worth far less — than the excercise price. Granted, this is only a small measure of comfort via the AMT modification, but it may rescue some out of work people lots of money they never should have paid in the first place.

Why this is in the bailout plan, I have no idea . . .


Hat tip:  GMSV

Guide to ISO-AMT in HR 1424

HR1424Final (PDF)

Rescue bill offers relief to some valley taxpayers hit with the AMT
Pete Carey
Mercury News 11/10/2008 06:36:48 PM PST

Category: Bailouts, Options, Taxes and Policy, Wages & Income

VIX Slips Below 50

> Who could have predicted that traders would be celebrating the decline of the Chicago Board Options Exchange’s volatility index below the 50 mark? We saw the VIX peak late October, coincident with the worst of the credit freeze and market panic. The VIX closed yesterday at 47.76, down 11%, for the first close below…Read More

Category: Contrary Indicators, Markets, Options, Psychology, Technical Analysis

Look For Expiry Driven Volatility Today

Category: Markets, Options

Intrade Election Update, 9/20/08

Category: Options, Politics

Betting on Bear’s Bust

Category: Options, Psychology, Short Selling, Valuation

Impact of Eliminating Uptick Rule

Category: Options, Technical Analysis, Trading

Options and Monday’s Lows

Category: Markets, Options, Trading

Backdating Options Scorecard

Here’s a nice free feature courtesy of the online  They posted an updated look at more than 120 companies that have come under scrutiny for past stock-option grants. Note: This list contains companies that have disclosed government probes, misdated options, restatements and/or executive departures. Some companies that have undertaken or disclosed internal probes but…Read More

Category: Corporate Management, Earnings, Options

June QQQQ 38 Calls

Category: Options, RR&A, Trading