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My wife and I have some vested options in Zulily from when she used to work there. The stock has been very poor so far, but this morning it was announced they are selling to QVC and the price show up 50% from ~$12.50 to ~$18.50.

We are both very inexperienced in trading and evaluating the market. What we want to know is, is it typical that the price may climb a little more throughout the day, or is the morning rush pretty much the peak?

Lastly, what are our best options to save the most money? We were told to do a same-day sale of the options when we purchase them for the best tax situation.

  • My recollection is that a same-day sale is a convenience offered by a broker; it has nothing to do with taxes. Ordinarily, to exercise options you have to pay for the stock; then you can sell it. A same-day sale just means that the broker exercises the option, sells the stock, pays off the option price, and pays you the difference. – Pete Becker Aug 17 '15 at 14:22
  • The best tax situation is to exercise the options and hold the shares for a year. This will qualify you for capital gains. Holding the shares for a year introduces risk, however. The stock could go up in a year. It could go down. It could become worthless. There's always a tradeoff. In your situation, with a poorly performing stock, it's probably best to dump the stock now, get the best price you can, and not worry about the taxes. It's better to be taxed on something than to end up with nothing. – Mohair Aug 17 '15 at 16:45
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The deal is expected to close sometime in Q4. The fluctuation though the day is just noise. The price will reflect a discount to the full takeover value, reflecting the risk of the deal falling through.

Cashless exercise is a good idea if you don't wish to own any QVC shares.

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