If your stock options are about to expire and you’ve got stock options to sell, consider selling them early. It could be that this will be your last opportunity to sell your stock options for a while, and you need to get them out of the way.
When you sell your stock options, you take the money you made selling them and put it into the stock. You also have options to buy another stock at a higher price than the one you sold, so at least you know you’re going to be able to buy the stock you originally sold at a higher price.
When buying stock, you usually want to get as much of the value out as possible, so not selling stock options early could be a bad move. That said, you can always sell them later if you want to. The problem with selling stock options early is that you probably won’t make much money. If you sell them in the first place, your options are worth a minimum of $1 on the date they are expiring to protect the value of your options.
However, if you sell your options and make a bunch of money, you can use that money to buy a home. Or, just keep some of it. You can use the money to pay for a vacation or to buy a new car.
Now I’m going to use the example of my previous boss to illustrate the issue. He was a big-time stock broker. He had a long list of stocks he would buy and sell. He would go to lunch on occasion with his investment buddies, and they would talk about the best stocks to buy and sell. His stock broker also had a very large number of options which, when exercised, would give him the first dollar in the account.
If you’re going to use a stock broker to buy stocks and sell stocks, you should be aware that a lot of stock brokers are not very clever. They will simply make you buy or sell stocks based on things like the amount of money you give them, the amount you expect to collect on those trades, and so on.
One stock broker I worked with in my early days of investing was a woman who gave me a lot of really bad advice. She would tell me to buy stocks that would make me a lot of money, but I had no idea how it was going to pay for itself. In short, she would tell me that if I was going to gamble, you had better keep all my money in the bank. And that was true, but it was also a lie.
Even though a stock broker is a person, a stock broker is usually a “broker” in the sense that he or she is an intermediary between the buyer (you) and the seller (the seller). This means that, like all intermediaries, the broker is only as good as the two parties that he or she is working with. If you aren’t careful, you can cause yourself to be a broker yourself.
Stock brokers are often paid commission fees. The reason being that, in order to make money, brokers have to work with buyers and sellers. If you do your own buying and selling, you have the knowledge and skill to make money because you can sell or buy on your own without having to rely on anyone else. But if you have been doing it for a while and you don’t know what you are doing, you may be a broker yourself.
It’s hard to know where to begin when you see a company that has a very good stockbroker on its board. There are two things to note; first, you have to know everything about the company to get it to be a good broker. Second, it’s good to know how to make money on a company that is good at everything.
