A covered call is a bullish strategy.
A CEO (or any executive paid on stock) is expected to and allowed to sell stock they are awarded, it's usually more than half of their total comp.
Options positions held by officers/directors/insiders are not reported in company filings, so your entire argument is moot to begin with.
I deleted my post because I impulsively engaged in a stupid argument, I'm not continuing this conversation.
Direct quote from the SEC covering Form 4 (
https://www.sec.gov/files/forms-3-4-5.pdf, emphasis mine)
"What’s a Form 4?
In most cases, when an insider executes a transaction,
he or she must file a Form 4. With this form filing, the
public is made aware of the insider’s various transactions
in company securities, including the amount purchased
or sold and the price per share. Form 4 must be filed
within two business days following the transaction date.
Transactions in a company’s common stock
as well as
derivative securities, such as options, warrants, and
convertible securities, are reported on the form."
And from the actual Form 4 (
https://www.sec.gov/files/form4data,0.pdf)
"Non-Derivative and Derivative Securities
(i) Report acquisitions or dispositions and holdings of non-derivative securities in Table I. Report acquisitions or dispositions and holdings of derivative securities (e.g., puts, calls, options, warrants, convertible securities, or other rights or obligations to buy or sell securities) in Table II. Report the exercise or conversion of a derivative security in Table II (as a disposition of the derivative security) and report in Table I the holdings of the underlying
security. Report acquisitions or dispositions and holdings of derivative securities that are both equity securities and convertible or exchangeable for other equity securities (e.g., convertible preferred securities) only in Table II."
So I'm confused how someone with your vast expertise can claim that "Options positions held by officers/directors/insiders are not reported in company filings"? You are aware that Form 4's are publicly released and what is on them? And why you would not realize that your so called "investing public" is who the CEO owes their fiduciary duty to? I suppose claiming things that are demonstrably false is a "stupid argument"...on your part.
A CEO can absolutely sell their shares, it is absolutely a big part of their comp, and it is completely accepted that they'll do so at some point. It also indisputably acts as a huge signal to the market, something that everyone in the market (except you apparently) understands. As a result, a CEO will generally engage in some kind of regular sales schedule with an explanation if they're really short of cash or wait until they retire or fired to dispose of their shares if they're able to live off their salary. They decidedly don't start selling covered calls on their stock at the most volatile period in their company's history when they desperately need new debt and equity investment like Tesla. Because they thought it was a good time to monetize their compensation and think it does't matter because only the "investing public" cares. Unless, apparently, they're being advised by you. And really, capping your upside is "bullish" versus simply owning the stock? If so, I'd love to do some OTC transactions with you, PM me.
Seriously though, we'd all love to know which public company CEO's you've advised, apparently they've been failing to fulfill their Form 4 duties now on top of everything else so they're great short candidates!
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