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Between stock options and owning stock out right, if I need fast cash, which of these two would be better to hold onto.

I have about the same net value in each. I'm not sure it make a difference but was just curious.

Thanks...

Dave

Oct 02, 2015 by David in  |  Flag
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Hi David, I have a few questions before I can offer advice. Where these stock options incentive stock options (ISO) or non-qualified stock options (NSO)? Or Restricted Stock Units (RSU) that were granted to you? If so, long since they were granted and exercised? Have you paid taxes on the options yet? Understanding your cost basis in an important part of your decision of which to sell. Have you owned the stock longer than 12 months? Sorry I cannot just give you an answer...need more details! -Steve

Comment   |  Flag   |  Oct 06, 2015

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Hi, I would additionally ask whether the stock options pertain to a stock that is lightly traded and therefore subject to volatility or the risk of illiquidity. Or are the options for a high quality blue chip stock?

Comment   |  Flag   |  Oct 06, 2015

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John Essigman Level 17

Hmmmm....

If you need fast cash then I would suggest a separate cash account or emergency reserves. Frankly, stocks or options are generally a poor choice if you need liquidity.

Regards
John Essigman
www.bluecreek.net

Comment   |  Flag   |  Oct 11, 2015 from Cleveland, GA

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Danna Jacobs Level 1

In addition to the above points, there may be significant tax implications to selling the stock options. Have an advisor or accountant review this closely so you understand all of the downstream effects of this decision.

Comment   |  Flag   |  Oct 11, 2015

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This is a great question! I wrote a pretty extensive article on this subject a couple years ago that outline all the advantages and disadvantages of each. Hope it's helpful: http://olesenwm.com/2011/12/rsus-or-options-which-should-employees-choose/

Comment   |  Flag   |  Oct 16, 2015 from King of Prussia, PA

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Please have a personalized analysis done by a professional to determine the answer to your question. Bottom line... it depends on the stock options and the stocks you own.

Examples - If an option is not yet in the money, you may want to wait and not sell depending on the time value. If you own a stock that pays a great dividend, you may want to wait and not sell so you do not give up the cash flow.

Comment   |  Flag   |  Oct 20, 2015

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