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Spring Loading

Definition
Waiting to grant an employee stock option until just before good news about the company reaches the market. Because the strike price of the option is tied to the day it is issued, waiting until before good news hits the market increases the value of the option. Once the market reacts to the news by pushing the stock price higher, the employee can exercise the option at the lower strike price. This options dating technique is criticized because it often only benefits the executives granted the option, not the shareholders.

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