A buyback option (TT JulAug05 p18-20)

The economic advantages of option-based share buyback techniques have led to considerable amounts of such activity. The tax, accounting and legal aspects of such transactions are clear. Companies looking to repurchase shares in large amounts, or who are constrained in their ability to access market liquidity by closed periods or other considerations, might benefit by selling puts or using similar techniques within their buyback programmes.

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