Options: That's Awfully Good Timing

For a few years in the late 1990s, former E*Trade Group Chief Executive Christos M. Cotsakos epitomized a new breed of fast-moving entrepreneur who propelled the dot-com boom. Combining brash tactics with great business timing, his aggressive "Boot your broker" ad campaign not only made online trading hip but also established E*Trade (ETFC ) as a major player.

Turns out that's not the only way Cotsakos demonstrated good timing. On six separate occasions between 1998 and 2002, Cotsakos exercised stock options when E*Trade hit a monthly low, and he held on to the shares. At first glance, that hardly seems lucky: Executives usually try to exercise options near stock highs to pocket the biggest profits. But going for low exercise prices and holding the stock for a while could have enabled Cotsakos to slash the tax bill owed when he sold the shares.