The Suitability of Exercise and Hold

Date: 06-2002
Author: Craig McCann, Dengpan Luo

Hundreds of lawsuits are currently working their way through the courts and arbitration panels over a strategy referred to as exercise and hold. The advice to exercise employee stock options and hold the acquired stock is essentially advice to acquire and maintain a concentrated position. As such, the advice to exercise and hold can be evaluated within the familiar suitability framework.


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