ISO 实例分析.

PDLI director did the following transactions when PDLI is about $10.60:

28-Mar-08 SAXE JON S Director 93,200 Direct Option Exercise at $9.66 per share. $900,312
6-Mar-08 SAXE JON S Director 20,600 Direct Option Exercise at $9.66 per share. $198,996
3-Mar-08 SAXE JON S Director 35,360 Direct Option Exercise at $9.66 per share. $341,577
27-Feb-08 SAXE JON S Director 10,840 Direct Option Exercise at $9.66 per share. $104,714

This is not a smart move.

The cons:

1. The option he has is at least $2.4 per share, which is based on Jan 2010, strike price $10. In reality, his options are more valuable because the effective period is longer. Basically, he paid $12 (9.6 + 2.4) for $10.6 stocks.

2. He is more likely to pay AMT for this. Also he lost the potential downside gain (you can see this in my solution below).

The pros:

1. A simple implementation.

One of solution is:

Buy the stocks at open market. For his position and volume of stocks, it is feasible. Sell the call at $10, Jan 2010. Decompose this strategy:

(1) the stock position, which is exactly same as his current position.

(2) ISO and short call, which bring him extra premium (at least 10%, $2 premium over $10 stock, $1 compensates his payment for stocks from open market)

In this strategy, you do not pay tax front and have premium front.

Disclaimer:

The above case might not be suitable for you. Take this at your own risk.
I am not a commercial advisor. This is not an ad.