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Securities

Jun. 25, 2014

Playing with fire: loans to exercise stock options

In short, it is an extraordinarily dangerous thing to do with potentially very damaging consequences. By Ted Wang


By Ted Wang


There is a current debate as to whether we are in a period of high valuations, irrational exuberance or a down-right bubble. I don't know, but I have seen one artifact from the actual bubble rear its ugly head in recent times: the use of loans to exercise stock options. In short, it is an extraordinarily dangerous thing to do with potentially very damaging consequences.


The Basics


Currently, the federal long term capital...

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