The period of time an investor is treated as the owner of a security for purposes of calculating the results under, or availability of, treatment of the security under the Internal Revenue Code or SEC rules. As a general rule, longer holding periods create better results for investors under both tax and securities rules. Frequently, the holding periods for tax and securities purposes are calculated differently and in both cases produce results that may surprise investors. For example, if an investor buys stock and pays for it with a promissory note, the holding period under SEC Rule 144 commences only after the note is paid in full, rather than from the date the stockholder pays for the security by issuing the promissory note. For capital gains purposes, seemingly similar circumstances produce very different results. The holding period of common stock purchased pursuant to an option with a significant exercise price commences only when the stock is purchased (i.e., converted) rather than when the option is obtained. This holding period differs from that of common stock purchased pursuant to a convertible security. In the latter case, the holding period commences when the convertible security is originally purchased rather than when the conversion is effected.