Buying protective put to hedge values of RSUs

FactSet jnel
Mar 25, 2018 11 Comments

I recently got a job at Amazon and got RSUs as part of my comp package. I’m sure most ppl have this as it’s pretty standard at all major tech companies. I was wondering what rules for buying a protective puts are to hedge the values of our rsu’s. Has anyone thought of this? Even if we can’t hold an option or shout our company’s stock can a family member? Love to hear other people’s takes. I can understand why the company wants to give us equity but if we want to bank on steady income stream seems like protective put is smartest thing to do.

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TOP 11 Comments
  • Qualcomm JmFx26
    Many companies prohibit their employees from buying options in their own stock. Do check before going down that path.
    Mar 25, 2018 3
    • New DuQvV7
      I don’t know this to be true.

      At most it will be “some”, not “many”. And outside specific level of employees i don’t know if any specific restrictions.

      Care to share a link.

      Me: Decade doing dev work for a heavily regulated trading firm.
      Mar 25, 2018
    • Amazon hUlak
      This is the case at Amazon. Trading in options has to be approved by legal per insider trading policy. It probably won’t be approved.
      Mar 25, 2018
    • Amazon / Eng ᕕ( ᐛ )ᕗ
      Yes, I thought of this too, and no you can’t do it. Option trading is prohibited for employees unless you specifically get approval.
      Mar 25, 2018
  • New Hbj864
    Sell covered calls on the vested stocks for generating monthly incomes
    Mar 26, 2018 2
    • Facebook lylak
      They have to check rules for this. Some companies do not allow any derivative trading of their stock for employees.
      Mar 27, 2018
    • New Hbj864
      Covered calls are generally exempt since it doesn’t fall under the class of speculation.. But, yeah better to confirm first..
      Mar 27, 2018
  • Juniper lDvY67
    Seems like you could do this prior to becomng a fte, as you wouldn't yet have these restrictions and know the rsu totals
    Mar 25, 2018 0
  • Facebook lylak
    Insider trading includes family members
    Mar 25, 2018 0
  • FactSet jnel
    OP
    I am aware I may not be able to do it but how about if a family member does it? Or a spouse?
    Mar 25, 2018 0
  • Tableau mwky30
    If you’re allowed to you should. It’s we worth the option premium even tho it fees expensive
    Mar 25, 2018 0