Options Trading Tutorial

CEO or CFO exercising stock options?

What does it mean when a CEO or CFO execises their stock options? Are they selling or buying? Is it a time to buy shares of that company or stay away for a while?

Public Comments

1. CEO's sell their options all the time and for many various reasons. The more important person to watch regarding this is the CFO. When they are buying (large quantities), this is a good thing. When they are selling, again the CFO is the one to watch, since he is the one with the most knowledge of thefinancial condition of the company. But it's all relative. If it's only a few thousand shares, I wouldnt put much weight on the transaction. If'it's a few hundred thousand share, this could be an important signal depending on what percentage of the shares outstanding this is. You can get an idea of insider transactions at... http://moneycentral.msn.com/investor/invsub/insider/trans.asp?Symbol=hon ...