Hca employee stock options

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Wife has a stock purchase option. HCA has also negotiated a discounted sales commission for when you sell shares of HCA stock. I've done research into stocks before, but quite honestly, we've not ever invested in beyond the k's; I really have been feeling the need lately to expand our investment catalog, and again, it seems a health care company would be a failry safe bet for gradual growth.

What am I missing here? Is there a general downside to these deals, beyond the general "gamble" of buying stocks? What are some experiences and anecdotes that might shine some light on this? What happens if the company is bought by another? If there is no required holding period, it's free money. I have to imagine that plans which include a discounted price are tethered to mandatory holding periods by necessity.

Though even without a holding period, an immediate sell-off may not be the best option depending on incurred fees and capital gains tax though it seems like the employer has gone out of its way to minimize fees in OP's case. On a side note, if this does happen I wonder if HCA's historical prices reflect any of this Remember to enter the likely short term capital loss on your tax return. The discount is taxed as earned income.

The commission on the immediate sale is taxed as short term capital loss and any change in market price between the purchase and sale is taxed as short term capital gain or loss. That sounds like an employee stock purchase rather than options. This is probably what you want to do unless you are really confident in the company. Depending on which company is used as a broker you might even be able to setup an automatic flip that sells the shares as soon as they are in the account.

The purchase time maybe after hours or worse over the weekend , so there is risk of the price changing between the buy time and market open.

Your wife may have money deducted each pay check, but the stock only gets purchased once a quarter or less. If the company is bought or your wife leaves, they will give her deducted, but unspent cash back. What happens to shares depends on the specifics of the deal.

If she quits or gets fired, the deducted but uninvested money from the current quarter is returned. If the company is acquired, they may have some more generous treatment of the deducted but univested money from the current quarter worst case is they just return it.

If the amount of stock is small enough, that commission might be a serious factor.

The fee to transfer to a less expensive brokerage account is even higher, so it only makes sense if you want to transfer several lots at once and later sell them separately.

Any difference between the market price when you bought and the price at which you sell net of commission is taxed as capital gain or loss.

If you want to hold the stock long term, the employer pays the annual account fee, so you don't get ripped off on that like the commission and transfer fees. Of course if you were opening your own investment account, you can almost certainly find one with no annual fee. If you want that stock as an investment, I would not worry about the lack of diversification for the first few years. If you accumulate employer stock over many years, that is a reason to worry that your job and a large investment are both in the same company.

I assume you also have a job, so the diversification issue is less significant than for a single income individual or family. If you accumulate the stock, think about that aspect again in a few years. It's a large publicly traded company, you can always cash out if you want to, and if they merge you'll be issued new shares or whatever the deal is. Never have your assets and your livelihood all tied up in one company.

Computershare

The others eluded to that, but man is that succinct. The others pointed out some fine print I'll look into, though. Use of this site constitutes acceptance of our User Agreement and Privacy Policy.

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Given that index fund returns will likely be higher, I'm thinking of taking the loan and investing the money.

Is there a downside I'm not thinking of? All questions about your personal situation should be asked here. FTSE Russell Index Considers Booting Firms With Lots of Non-Voting Shares.

This is an archived post. You won't be able to vote or comment. Thanks for all the help! I've been a participant in several that did not have mandatory holding periods.

You have to pay taxes on the discount and the STCG, if any. Posts are automatically archived after 6 months.