stock options /cvs

[sosoo]

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i have stock options granted april 2013, and it says it is now exerciseable. does this mean i can sell it for a profit, and withdraw the money from etrade? then it says the expiration date is april 2020. so can i sell it and withdraw the fund now, or do i have to wait til 2020?

 

[SouthernRetailRPH]

you should be able to exercise and sell anytime between now and 2020

 

[zelman]

i have stock options granted april 2013, and it says it is now exerciseable. does this mean i can sell it for a profit, and withdraw the money from etrade? then it says the expiration date is april 2020. so can i sell it and withdraw the fund now, or do i have to wait til 2020?

Yup. You can exercise it in a few different ways. On etrade there's a little video that explains it. Basically, you can either buy the stock and keep it, buy the stock and sell it, or buy the stock and sell enough to pay for it and keep the rest as stock. In all of those options you can specify a minimum price at which to sell (along with a max time to wait for that to happen), or you can just tell it to happen ASAP.

 

[cozypark]

What would be better for investment? Do you just sell out right away? or keep it for later hoping its value goes up?

 

[PharFromNormal]

What would be better for investment? Do you just sell out right away? or keep it for later hoping its value goes up?

How do you define better? What's your tolerance level for risk/uncertainty? What are your short term and long term financial goals? Sure you could keep it and hope the value goes up but that's unknown. Do you have a need to have that in cash? Do you believe there are better areas you can invest that money in if you cashed out? Does overexposure bother you and if so are you overweight in your companies stock?

You should likely either learn more about financial planning for yourself or find a guy you trust and answer some of those questions with them.

 

[Old Timer]

What would be better for investment? Do you just sell out right away? or keep it for later hoping its value goes up?

Once you exercise, sell them. DO NOT hold them. Buy them back if you want. But DO NOT hold them.

In our example. You have 100 shares at $50.00. You exercise your options on April 1 at $100.00 per share. You now have income of $5,000.00 that is taxable to you. If the stock falls to $25.00 while you own it, you still pay tax on the income. Lots of people went bankrupt this way during the dot.com revolution.

 

[Dr Wario]

Once you exercise, sell them. DO NOT hold them. Buy them back if you want. But DO NOT hold them.

In our example. You have 100 shares at $50.00. You exercise your options on April 1 at $100.00 per share. You now have income of $5,000.00 that is taxable to you. If the stock falls to $25.00 while you own it, you still pay tax on the income. Lots of people went bankrupt this way during the dot.com revolution.

Holding them for one year after exercising has some fairly large tax advantages.

 

[Old Timer]

Holding them for one year after exercising has some fairly large tax advantages.

They have zero tax advantages. In the CVS plan, all options are taxed as W-2 income. There is no 1099 income and capital gains implications.

 

[SmallCapPharma]

I was given CVS stock options for the first time, but I cannot figure out how to actually accept them. I was told I have to go to etrade, however I try using this link (Employee Stock Plans - E*TRADE Financial) and it just keeps saying no record found. Anyone know if this is the correct way to accept them?

Also, regarding 401k match, does this only kick in after I have been full time for one year? I see no match with my first two contributions so far

 

[owlegrad]

I was given CVS stock options for the first time, but I cannot figure out how to actually accept them. I was told I have to go to etrade, however I try using this link (Employee Stock Plans - E*TRADE Financial) and it just keeps saying no record found. Anyone know if this is the correct way to accept them?

Also, regarding 401k match, does this only kick in after I have been full time for one year? I see no match with my first two contributions so far

I had the same problem my first time, I think they have to do something behind the scenes to load into the system or something. About a months or 2 later I was able to register and accept them.