Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

Crow

Shorting the Company That I Work for

Recommended Posts

Is there anything illegal or that could get me fired for taking a short position against the company that I work for assuming that the decision to short was not based on insider information? There are legitimate reasons to do this, for example, many companies grant options and restricted stock units that take a long time to vest. If I feel that I have hit a good price, but have to wait a while until I can sell my unvested stock, shorting the stock to lock in the current price would make sense.

Share this post


Link to post
Share on other sites

I am no expert on this, but I think you are missing the point of the restrictions on selling the stock. This is a murky area that could lead to dismissals, unlikely much more than this unless you are a key decision maker in the firm. Best check your employment contracts and seek proper legal advice.

Share this post


Link to post
Share on other sites

You are describing something more of a hedge. I have done this for clients a while back and used options instead of shorting the stock. It was a cheaper alternative to putting up the margin on a $4 million dollar position. There is nothing wrong with trading in and out of the stock if the company allows you to take positions. Some companies want you to disclose all positions that you hold to make certain that there isn't a conflict of interest with some of the companies that they do business with.

Share this post


Link to post
Share on other sites

There is no conflict of interest as I am a software engineer and work for a large tech company. I don't have to disclose any of my positions. But I assume that the SEC is always watching for insider trading even though my position would be purely as a hedge.

Share this post


Link to post
Share on other sites
Is there anything illegal or that could get me fired for taking a short position against the company that I work for assuming that the decision to short was not based on insider information? There are legitimate reasons to do this, for example, many companies grant options and restricted stock units that take a long time to vest. If I feel that I have hit a good price, but have to wait a while until I can sell my unvested stock, shorting the stock to lock in the current price would make sense.

 

Hi Crow

I'm confused (that will make mitsubishi smile)

You sell the stock short to buy it back cheaper. What happens if the stock goes up?

If you dont think it will go up, you know something.

And when the company discovers your disloyalty, you are dead meat.

regards

bobc

Share this post


Link to post
Share on other sites
You are describing something more of a hedge. I have done this for clients a while back and used options instead of shorting the stock. It was a cheaper alternative to putting up the margin on a $4 million dollar position. There is nothing wrong with trading in and out of the stock if the company allows you to take positions. Some companies want you to disclose all positions that you hold to make certain that there isn't a conflict of interest with some of the companies that they do business with.

 

What about using single stock futures?

Share this post


Link to post
Share on other sites
Is there anything illegal or that could get me fired for taking a short position against the company that I work for assuming that the decision to short was not based on insider information? There are legitimate reasons to do this, for example, many companies grant options and restricted stock units that take a long time to vest. If I feel that I have hit a good price, but have to wait a while until I can sell my unvested stock, shorting the stock to lock in the current price would make sense.

 

You can contact the SEC directly:

 

https://tts.sec.gov/oiea/QuestionsAndComments.html

 

You "feel" that the stock has hit a good price. I would define exactly why you think the stock has hit a good price and document it. Is it because of the economy in general? The industry? Or do you think your company has no more upside? If you have no faith in more upside potential to your company, there must be a reason. Where does the reason come from? Your knowledge of the company, or your knowledge of the industry because you work for a company in the industry?

 

These are the things I would be trying to answer. Personally, I'd want to be able to provide an answer other than I just "felt" the stock price had hit a good price.

 

The company is providing the opportunity for employees to own stock as an incentive to do good work. That's the intent. You do a good job for the company, the company does well, the stock price goes up, you benefit. It's seems that what you are saying, is that the upside to the benefit is in question. Have you lost trust in the company, or the economy in general?

Share this post


Link to post
Share on other sites
There is no conflict of interest as I am a software engineer and work for a large tech company. I don't have to disclose any of my positions. But I assume that the SEC is always watching for insider trading even though my position would be purely as a hedge.
Depending on the timing, I would think.

Share this post


Link to post
Share on other sites

Hello,

 

I'm afraid that I know nothing of the legalities of your question.

 

However, one possibility might be if you were able to find another company's stock in the same sector that behaves in an almost identical fashion (ie it is 'highly correlated'), and can be expected to continue doing so in the future. You could then short this stock, rather than short your company's own stock. Even a sector ETF might exhibit a sufficiently high degree of correlation. Hell, if you're working for Apple then you could probably just short the NASDAQ . . .

 

The danger with this tactic is obviously that the instrument you short and the stock price of your company cease to move together - for instance if some news or event were to affect one without affecting the other.

 

Hope that's of some use.

 

BlueHorseshoe

Share this post


Link to post
Share on other sites
Is there anything illegal or that could get me fired for taking a short position against the company that I work for assuming that the decision to short was not based on insider information? There are legitimate reasons to do this, for example, many companies grant options and restricted stock units that take a long time to vest. If I feel that I have hit a good price, but have to wait a while until I can sell my unvested stock, shorting the stock to lock in the current price would make sense.

 

I dont think anyone was interested in this post.

 

 

I also do not think that you have enough money to risk a position of any size.

 

 

#foodstamps

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date: 22nd November 2024.   BTC flirts with $100K, Stocks higher, Eurozone PMI signals recession risk.   Asia & European Sessions:   Geopolitical risks are back in the spotlight on fears of escalation in the Ukraine-Russia after Russia reportedly used a new ICBM to retaliate against Ukraine’s use of US and UK made missiles to attack inside Russia. The markets continue to assess the election results as President-elect Trump fills in his cabinet choices, with the key Treasury Secretary spot still open. The Fed’s rate path continues to be debated with a -25 bp December cut seen as 50-50. Earnings season is coming to an end after mixed reports, though AI remains a major driver. Profit taking and rebalancing into year-end are adding to gyrations too. Wall Street rallied, led by the Dow’s 1.06% broadbased pop. The S&P500 advanced 0.53% and the NASDAQ inched up 0.03%. Asian stocks rose after  Nvidia’s rally. Nikkei added 1% to 38,415.32 after the Tokyo inflation data slowed to 2.3% in October from 2.5% in the prior month, reaching its lowest level since January. The rally was also supported by chip-related stocks tracked Nvidia. Overnight-indexed swaps indicate that it’s certain the Reserve Bank of New Zealand will cut its policy rate by 50 basis points on Nov. 27, with a 22% chance of a 75 basis points reduction. European stocks futures climbed even though German Q3 GDP growth revised down to 0.1% q/q from the 0.2% q/q reported initially. Cryptocurrency market has gained approximately $1 trillion since Trump’s victory in the Nov. 5 election. Recent announcement for the SEC boosted cryptos. Chair Gary Gensler will step down on January 20, the day Trump is set to be inaugurated. Gensler has pushed for more protections for crypto investors. MicroStrategy Inc.’s plans to accelerate purchases of the token, and the debut of options on US Bitcoin ETFs also support this rally. Trump’s transition team has begun discussions on the possibility of creating a new White House position focused on digital asset policy.     Financial Markets Performance: The US Dollar recovered overnight and closed at 107.00. Bitcoin currently at 99,300,  flirting with a run toward the 100,000 level. The EURUSD drifts below 1.05, the GBPUSD dips to June’s bottom at 1.2570, while USDJPY rebounded to 154.94. The AUDNZD spiked to 2-year highs amid speculation the RBNZ will cut the official cash rate by more than 50 bps next week. Oil surged 2.12% to $70.46. Gold spiked to 2,697 after escalation alerts between Russia and Ukraine. Heightened geopolitical tensions drove investors toward safe-haven assets. Gold has surged by 30% this year. Haven demand balanced out the pressure from a strong USD following mixed US labor data. Silver rose 0.9% to 31.38, while palladium increased by 0.9% to 1,040.85 per ounce. Platinum remained unchanged. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news. Andria Pichidi HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • A few trending stocks at support BAM MNKD RBBN at https://stockconsultant.com/?MNKD
    • BMBL Bumble stock watch, pull back to 7.94 support area with high trade quality at https://stockconsultant.com/?BMBL
    • LUMN Lumen Technologies stock watch, pull back to 7.43 support area with bullish indicators at https://stockconsultant.com/?LUMN
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.