Possibly. But the great majority of people, in my experience, sell options at the same time they exercise them. And when they do, the gain is treated as ordinary income, not capital gains, long or short.

In order to take advantage of the lower cap gains rate for stocks held a year or more, those exercising options would have to buy the stock outright -- at .70/share -- using their own funds or borrowed funds, then hold it for a year before selling.

Executives and board directors, ostensibly know as well or better than anyone that the future is always uncertain, which is why most, I believe, exercise and sell in one swell foop.

Taxes are withheld by law (unless you can prove you`ve withheld them yourself, or would not be subject to taxes when due), and they get a nice check without any outlay of personal capital.

JMHO.