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Dan Seder and the title "When to sell company stock"
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Why Consider Structuring A 10b5-1 Plan

Posted on 11/20/22
Dan Seder and the title "Why consider structuring a 10b5-1 plan"
Original Content By Dan Seder
Dan Seder
Dan Seder
Managing DirectorCFA®, CMT, CFP®

Sell Stock At Predetermined Price Levels

Executives with heavily concentrated positions in company stock should watch this video. Protect yourself from insider trading, take control of blackout periods, and learn how to set predetermined price levels to optimize your exit strategy. Learn how to unwind your concentrated position by structuring a 10b5-1 plan by watching this short video.

Transcript:

Dan Seder 0:00

Welcome. A number of our clients have heavily concentrated positions in company stock. And today, I'm going to talk about a unique tool that can be used to help unwind that position in a strategic fashion. This unique tool can be used by corporate executives to unwind their heavily concentrated position in company stock. And, that company stock could include directly held shares, restricted stock units, stock options, or performance shares. The tool is a 10b5-1 trading plan, which is a structure that, when put in place on the front end, executes on company stock in the future.

A few of the benefits include:

  • First and foremost, an affirmative defense against insider trading; and that's because a 10b5-1 must be set up during an open window, and have a 30-day cooling off period before trading can commence.
  • Secondly, and I think most uniquely, is that once it's set up, a 10b5-1 will trigger in the future, even if you're in a blackout period.
  • Third, and finally, it gives us the opportunity to set predetermined price levels on the front end to help you optimize your exit level in company shares.

So, through the use of technical analysis, if one of our upside price targets has been met, the plan, which is on autopilot, will automatically trigger avoiding the emotional tug of war at that time of whether you should hold or sell. If you're interested in understanding how a 10b5-1 could benefit you, give us a call.

Expressions of opinion are as of this date and are subject to change without notice. The information provided does not constitute tax, legal, accounting, or other professional advice and is without warranty as to the accuracy or completeness of the information. Any information provided is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation to buy, hold or sell any security. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. There are limitations associated with the use of any method of securities analysis. Indices are included for informational purposes only; investors cannot invest directly in any index. Every investor's situation is unique, and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Past performance does not guarantee future results. Investing involves risk and you may incur a profit or loss regardless of strategy selected. There is no guarantee that any statements, opinions or forecasts provided herein will prove to be correct.

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