When To Sell Company Stock
11/20/22
Q3 2022 Earnings Wrap [Video]
11/25/22
Dan SederManaging PartnerCFA®, 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.
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