Anabtawi on Spring-loaded Options

Josh Wright —  10 July 2006

Over at Professor Bainbridge’s place, Iman Anabtawi has some thoughts on the granting of “spring-loaded” options, an option granted at a market price that does not incorporate some favorable non-public information, and insider trading laws. The practice is analytically similar to granting a discount option (one with an exercise price below the market price) and is related to backdating (issued retroactively after the information is released). Check it out.

UPDATE: Ribstein responds.

Trackbacks and Pingbacks:

  1. TRUTH ON THE MARKET » *Why* Are Directors Awarding Spring-Loaded Options? - July 12, 2006

    […] Abnormal Returns » Blog Archive » Tuesday links: stealth stocks on Anabtawi on Spring-loaded Options.Frank on Kinderstart v. Google Antitrust Coverage.Eduardo Penalver on What’s wrong with what Eduardo Penalver thinks is wrong with property rights initiatives.TRUTH ON THE MARKET » The Unconvincing Antitrust Case Against Wal-Mart on Robinson-Patman Act Repealed! .Joshua Wright on Kinderstart v. Google Antitrust Coverage.Keith on Sirius/XM: An Antitrust Problem?.Keith on Kinderstart v. Google Antitrust Coverage.Bill Gates’s Retirement » Warren Buffett lunch attracts $455,100 bid on eBay (Reuters) on Sirius/XM: An Antitrust Problem?.ProfessorBainbridge.com on What’s wrong with what Eduardo Penalver thinks is wrong with property rights initiatives.Joshua Wright on On rigged(?) markets, casinos and Steve Bainbridge. […]

  2. Abnormal Returns » Blog Archive » Tuesday links: stealth stocks - July 11, 2006

    […] ProfessorBainbridge.com looks at the spring-loaded option grants and insider trading. (via Truth on the Market) […]