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If you receive stock as apart of your company compensation is it insider trading to sell covered calls on your stock? What if your spouse who literally doesn't know anything about the company is in charge of the account? Its normal for companies to do a vesting schedule to show they aren't buying/selling at a specific time. What if the call strategy you do is the same every month / week?!

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    Does your company allow trading options on its stock? It may not be illegal per se, but may still get you fired.
    – littleadv
    Commented Mar 14 at 16:30
  • @littleadv more likely they don't have the ability to trade the options, especially if they can't even exercise the options they have now.
    – rtaft
    Commented Mar 14 at 19:19
  • Yes the company in mind allows trading options on its stock Commented Mar 15 at 17:11
  • I used to work for a publicly traded company that prohibited shorting company stock, but had no prohibition against buying or selling any kind of options.
    – stannius
    Commented Mar 18 at 17:54

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It's only insider trading if you trade based on material, nonpublic information. Simply trading stock (or options on that stock) of a company you work for is not necessarily insider trading.

However, depending on your role, your company might have restrictions on selling stock at certain times (e.g. right before or right after public announcements or filings), or without prior approval, so you need to make sure that you're following your company's policy on employee trading as well.

What if the call strategy you do is the same every month / week?

That would certainly bolster any claim of not being based on non-public knowledge. In fact, many executives set up stock/option purchase and sale schedules purely to be able to defend against insider trading claims.

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Insider trading is making decisions about investing based on non-public knowledge about one or more companies.

  • It doesn't matter whether you are trading stocks or options.
  • It applies to both buying and selling. Though if your action is the opposite of what would be expected (selling stocks when you know of unannounced good news) that might be seen as a point in your favor.
  • It doesn't matter if you have the info directly from working at the company, or indirectly because your spouse told you. If your spouse "just happens" to buy some calls in your company stock just before a merger is announced, you'll have an uphill battle to prove that you never mentioned it to them.

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