Keep or sell shares as part of share scheme?

10
Found 15th Sep 2017
Bit of an abstract one but any thoughts appreciated!

I have some money invested in a 3 year sharesave scheme with Centrica PLC which is due to mature in March 2018 and give me an option price to buy each share at 200.99p. The current share price is only 190.40p at the moment but don't know whether it's worth cancelling now to get my money back, or waiting till March 2018 when the share price hopefully goes above the 200.99p?

Know interest rates are pretty terrible most places (already have flexdirect account with nationwide setup) but don't want it to come to March time and end up making no money.

Cheers!
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I would hold onto them. Yesterday's chat on the rates for short term lending and potential increase to the BoE base rate would hopefully have a positive effect on your shares. I've noticed it in my plans already this week.
It's never guaranteed but a good chance. Brexit negotiations may have the opposite effect though.... the joys of shares!
Other than the right to buy shares at 200.99p, what are the other benefits of being part of the scheme?

Because right now, if you think the price will be higher than 200.99p, you're better off just buying on the open market right now rather than waiting. If you don't, then the option will be valueless anyway. It doesn't seem like there's much of an upside to being in the scheme, from the details you've provided.
You have the right to buy them for 200.99 next March , you also have the right to NOT buy then if the price stays below that figure . You have a win/draw situation next March , I'd stay with it unless you have a pressing need for the cash .

Also most share save schemes pay a little interest on the savings (which you may miss out on if cashing in early ) . I don't follow Centrica shares myself but it is perfectly possible for individual shares to rise (or fall ) by 15-20% in 6 months .
Original Poster
Muir38 m ago

Other than the right to buy shares at 200.99p, what are the other benefits …Other than the right to buy shares at 200.99p, what are the other benefits of being part of the scheme?Because right now, if you think the price will be higher than 200.99p, you're better off just buying on the open market right now rather than waiting. If you don't, then the option will be valueless anyway. It doesn't seem like there's much of an upside to being in the scheme, from the details you've provided.


No other benefits, when I took out the scheme just under 3 years ago the share price was 250p but by signing up for 3 years, after those three years you get 20% off the share price. If I cancelled it and bought off the open market aren't there fees to purchasing?
AdamParrish1 h, 15 m ago

No other benefits, when I took out the scheme just under 3 years ago the …No other benefits, when I took out the scheme just under 3 years ago the share price was 250p but by signing up for 3 years, after those three years you get 20% off the share price. If I cancelled it and bought off the open market aren't there fees to purchasing?



Depends on the platform you use to purchase them, and the amount you purchase.

It also gives you the chance to re-assess your choice - if there is no discount for Centrica shares (because market price is below the strike price), would you still want to buy (only) Centrica? Depending on your other investments, it might be worth getting something more diversified rather than being tied to the performance of a single share. Put it this way, had you put the money in Centrica 3 years ago, you'd have lost over 20%, so it's a good chance to evaluate your investments as a whole rather than jumping into one share because of a discount.

That said, it isn't long until March, so you don't lose much by waiting and seeing.
Edited by: "Muir" 15th Sep 2017
2 things you need to conciser - 1 - do you need the money 2 - what is the likely chances the shares will rise.

I was in a similar situation some years ago, I sold the shares at £5.50 each and about 18 months later they were £16, I've not even checked for 5 years. Personally in your case I would wait till you really need the money.
Many share option schemes carry a balloon payment bonus, given at the end of the term.. eg £1000 paid in, balloon payment of £50, which can be cash or used to buy even more shares at the share option price, ie £1050 back to you or in shares.

Does your scheme have a balloon payment? If so you will likely lose it if you cash in before full term.
I would hold onto them, you haven't lost anything until you actually purchase them so decide when they mature, if the price is crap get your investment back if it's up buy then sell. You can always buy them and hold on for the dividends to and wait for the price to recover.
Depends how much you need the money.
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I personally would hold until march get my money back if it's below purchase price then reinvest in a better prospect company.
Time to start looking at companies you fancy and follow the price for a few months this will give you a idea of the price movement.
No shares go up in a straight line. Trust me I have lost thousands, but have made it too.
hang on until march 2018 and see if you can profit. only 6 months away and you won't get much interest any where even if you take the money out now.
Surprised if there isn't some interest / bonus on it. even without, (given the lousy interest rates) it may be worth keeping the option open - sure, if you think they will go back up, then taking the money and buying on open market might be better.

As it stands though, if you stay with it to the last, then if the shares are still lower, you can take the money, while if they are higher, you can take the shares, and keep them or stag them.
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