What are stock options?

What are stock options?
by

1 Answer

Answer :

Stock options are generally granted by your employer as part of an incentive-based pay package. The idea is that an individual is granted the option to buy a certain number of shares at a certain price, say $10 per share. Usually there is a vesting period before the options can be exercised. So, imagine you are granted 100 options at a sale price of $10 per share, with a vesting period of 1 year. If after one year, the stock is trading for $15 per share, then you can sell your options at that price and make $500 profit.
by

Related questions

What free website displays stock charts with automatic Support & Resistance indicators?

Description : What free website displays stock charts with automatic Support & Resistance indicators?

Last Answer : You can get pretty good customized charts from Yahoo Finance, but people don’t share their analysis for free. You have to do that work yourself.

Are you personally aware of any penny stock worth risking a small amount of investment these days?

Description : Are you personally aware of any penny stock worth risking a small amount of investment these days?

Last Answer : I knew of a person that dabbled in peeny stocks. He introduced himself to me by telling me he was a paronoid schizophrenic. He made more than $500,000 on one stock.

How to make a quick profit in the stock market?

Description : How to make a quick profit in the stock market?

Last Answer : answer:Rather than start with real money, I would create a free portfolio online and test your ideas. Google Finance is one place to do that. http://www.google.com/finance/portfolio

Would it be ethical to invest in BP stock right now?

Description : Would it be ethical to invest in BP stock right now?

Last Answer : Nope

Is there a specific college class on investing/stock market?

Description : Is there a specific college class on investing/stock market?

Last Answer : The Motley Fool Investment Workbook The Motley Fool Personal FInancaeWorkbook The Motley Fool is a real good resource.

Does any lucky dog own Berkshire Hathaway A common stock?

Description : Does any lucky dog own Berkshire Hathaway A common stock?

Last Answer : answer:For more details:Berk Hath For advice on kicking oneself, write to me privately.

Aren't the stock markets (AMEX, NYSE) just different forms of legalized gambling?

Description : Aren't the stock markets (AMEX, NYSE) just different forms of legalized gambling?

Last Answer : answer:Not at all. If you gamble, you know you that losings are larger than winnings, since the house takes a certain percent of all winnings. Overall, there's no way that the collective group ... , nothing is produced, except money for the casino owners. If you love gambling, buy casino stock.

How does the stock Market work? In layman's terms?

Description : How does the stock Market work? In layman's terms?

Last Answer : Take your pick of answers

How should I go about investing my considerable fortune in the Appliance Service Center?

Description : How should I go about investing my considerable fortune in the Appliance Service Center?

Last Answer : Since the generator will produce world peace the defense sector will plummet in value. Buy put options with different dates.

Which investment ideas are good?

Description : Which investment ideas are good?

Last Answer : The best investment advice is to diversify. Choose a few reliable mutual funds and maybe also put some money in a stock index fund. I did a search on Primerica and found this Not very encouraging.

What is the best investment you have made?

Description : What is the best investment you have made?

Last Answer : Apple Computer stocks. Way back when Steve Jobs was invited to come back to the company he co-founded, the price of the stock had recently fallen. I have never owned an Apple computer but, based on the ... shares. I don't expect Apple to grow like it has iin the past. There is too much competition.

Is there an iPhone app that lets you plug in the number of shares you own and your cost basis so that you can see your gains and losses in real time?

Description : Is there an iPhone app that lets you plug in the number of shares you own and your cost basis so that you can see your gains and losses in real time?

Last Answer : answer:Most financial news websites - I know that CNBC is one - have their own apps that do this specifically. I know that Yahoo! used to offer that service, too - and maybe they still do also, but I ... I have my account, but I require a manual login each time. I don't save passwords on my phone!

What does it mean to rollover a 401[k]? [context: E*trade]?

Description : What does it mean to rollover a 401[k]? [context: E*trade]?

Last Answer : I'm going through this process right now. A rollover is when you transfer your vested funds from your company's 401K retirement savings account into a 401K at another company, or to an IRA when you retire. ... There's a lot more to know but this, but this is the basic explanation. Hope this helps.

Is there a way one could invest in Hollywood movies?

Description : Is there a way one could invest in Hollywood movies?

Last Answer : Everyone knew The Avengers was going to score big. It would have been impossible to get some of that action. You would be better off paying for some film student to make that little horror ... with the Hollywood system, which has bookkeepers who are experts in hiding costs, and boosting expenses.

If you cannot beat the market, why would you buy individual stocks over index funds?

Description : If you cannot beat the market, why would you buy individual stocks over index funds?

Last Answer : answer:When I was a broker, most customers did in fact, own solely funds. Some customers with high net worth or with higher risk tolerances would purchase individual securities they had a good ... look at the prospectus and validate that the funds aren't investing in the same damn companies.

How do I sell a 10 ounce silver bar?

Description : How do I sell a 10 ounce silver bar?

Last Answer : answer:Unfortunately, there is a raft of Chinese counterfeiting gold coins and silver bars. They can match the desired density of the metal by using precise amounts of tungsten. Clearly the counterfeiting ... sell the bar you will need some document that attests to its authenticity. That is tough.

Best way to buy gold?

Description : Best way to buy gold?

Last Answer : One of Beck’s staunchest supporters is Goldline, but I don’t know anything else about it. You might talk with an investing firm.

In option trading, what does this mean: 2 Jan 2010 300 puts to open?

Description : In option trading, what does this mean: 2 Jan 2010 300 puts to open?

Last Answer : Bf says: Ssomeone agreed to buy 30,000 shares (100 shares per put, 300×100) on Jan 2.

Suggestions for finding a Roth IRA for S&P500 with lowest possible fees.

Description : Suggestions for finding a Roth IRA for S&P500 with lowest possible fees.

Last Answer : Check out Vanguard.com S&P 500 index fund. Fees are really low; just plug in money every month.

What's the earliest a market maker can cancel a stop-loss order on his own?

Description : What's the earliest a market maker can cancel a stop-loss order on his own?

Last Answer : 120 days is the norm

What is the easiest way to raise venture capital in today's economy?

Description : What is the easiest way to raise venture capital in today's economy?

Last Answer : I just hosted an event about this issue in silicon valley. What the VCs said at the event, and their statement may have been a bit biased, was that in this economic climate, if you have a good ... fewer people trying to get VC funding, so it is easier to break through the noise with a good idea.

How to buy gold?

Description : How to buy gold?

Last Answer : Go to a jewelry shop?

What happens when you report a loss on your income tax?

Description : What happens when you report a loss on your income tax?

Last Answer : I believe a loss offsets your income you make, but that is only if you sell your stocks (or whatever you have in your portfolio). If you hang on to it then I don't think you can claim a loss. So ... for certain, but my brother does it all the time so he doesn't have to give the gov so much money.

What should a single 28-year-old with no debt be monetarily invested in?

Description : What should a single 28-year-old with no debt be monetarily invested in?

Last Answer : Assuming you don't have a big purchase in the next few years (like a house), you should have an index fund.

Are XM and Sirius satellite radio merging?

Description : Are XM and Sirius satellite radio merging?

Last Answer : I doubt it. Would be best for both companies since neither can turn a profit. I don’t think the government would allow it. Satellite radio is dead from the iPod.

How many of buy based on consumer report?

Description : How many of buy based on consumer report?

Last Answer : answer:I relied on them for my last purchase, an 05 RAV4. If they are padded, I would say the skew is probably negligible. I don't see what incentive they have to pad scores though, since ... said it basically sucks for 95% of drivers. You could always compare CR's reviews and ratings with Edmunds.

What's the way to make the highest interest on some cash, that doesn't tie it up for to long?

Description : What's the way to make the highest interest on some cash, that doesn't tie it up for to long?

Last Answer : It depends on your tolerance for risk, how much access you have to have to the money, etc. For straight savings, some Ask-publicites have used ING Direct, a Web bank that pays higher interest rates. It is FDIC insured.

What is the easiest way to make $30k passively on an annual basis?

Description : What is the easiest way to make $30k passively on an annual basis?

Last Answer : If you find out, you could sell the secret to all of us, and make far more than 30k!

How to invest for an income of $2000 a month?

Description : How to invest for an income of $2000 a month?

Last Answer : How can you avoid getting a job and still get by? Murder somebody. If that's too bloody for you, commit treason or armed robbery. Something big. Then, some nice large men will take you to the magical ... or board. You'll have plenty of nice friends, and won't have to worry about not getting laid!

Selling stock options?

Description : Selling stock options?

Last Answer : If you sell some options you get all the money paid for the options. There is no daily cash flow. If the buyer does not exercise the option then you made that much. f the buyer decides to ... pay when you actually buy the stock to deliver - if the buyer decides to exerecise the option you sold.

When do I have to pay taxes if I'm given stock options for services?

Description : When do I have to pay taxes if I'm given stock options for services?

Last Answer : Is the company stock listed publicly? Where do you live? Options are different to actual stocks. Be careful.

Better to buy Apple stock or options on Apple stock?

Description : Better to buy Apple stock or options on Apple stock?

Last Answer : it depends. if you just want a quick profit in the short run, then i would buy stocks. if youre in it for a bigger investment, i’d go either way.

What are my stock options when investing in television?

Description : What are my stock options when investing in television?

Last Answer : The 4 biggest television networks are CBS, Fox, ABC, and NBC. CBS trades on the on the NYSE by the ticker symbol of 'CBS'. Fox is owned by News Corp. and goes by the ticker symbol of 'NWS'. ... that makes TVs you could buy stock in is sony. You can also buy stock in RCA victor electronics and tvs.

Which websites carry information on the basics of stock options?

Description : Which websites carry information on the basics of stock options?

Last Answer : To find out information on the basics of stock options you can try this www.cboe.com/. They have several helpful hints.

What are the advantages of ipo stock options?

Description : What are the advantages of ipo stock options?

Last Answer : Ipo is the first sale of stock by a company. Small business looking to expand the growth of their company will use IPO stock options. This is a smart way to go big.

How do I backdate my stock options for tax purposes?

Description : How do I backdate my stock options for tax purposes?

Last Answer : Stock Options backdating is a very controversial subject, as some feel that it should be illegal. However, for tax purposes, one may issue stock options later than the date listed on the options but may not do so due to low underlying stock prices.

What are Cashless Stock Options?

Description : What are Cashless Stock Options?

Last Answer : Cashless stock options from your employer are an incentive for you to work harder. They are "giving" you stock in their company, which in turn makes you work harder to make more money.

What are some examples of CEO stock options?

Description : What are some examples of CEO stock options?

Last Answer : Ceo stock options are when a company offers their CEO's stock in the company in lieu of increased pay or as an incentive to join a company. You need to carefully weigh the pro/cons of the company's stock. If the company goes under will you lose everything or do you have other assets.

What exactly is a stock options tutorial?

Description : What exactly is a stock options tutorial?

Last Answer : It is a tutorial that will guide you through your options for trading stocks. Like step by step directions for a certain method of trading. You can then decide which option is best for you.

What are the selling stock options?

Description : What are the selling stock options?

Last Answer : Stock options are a contract specifying a contract for a future purchase between two parties. The buyer has the option to buy at a future date and the seller, the obligation.

What options are available to me when my stock option vesting period is up?

Description : What options are available to me when my stock option vesting period is up?

Last Answer : You have three options once the vesting period is over. You can buy shares at their vested value and hold them for a long time, you can buy shares at their vested value and then sell them after the ... applicable), or you can buy shares at their vested value, keep some and sell the rest. Good luck!

Do I need a stock broker if I'm interested in learning stock options?

Description : Do I need a stock broker if I'm interested in learning stock options?

Last Answer : No, you do not technically need a stock broker if you are interested in learning stock options but it is highly reccommended that you consult a stock broker before you make a portfolio.

How can i find the valuation stock options?

Description : How can i find the valuation stock options?

Last Answer : A good broker could help you in this area. He or she would assess the value currently of the stocks and then advise you as to the best thing to do. You could get some idea of whether you should move them, sell them or hold them longer.

The trading of a public company’s stock or other securities like bonds or stock options by individual with possession of material, non-public information about the security is called- (a) Insider trading (b) online trading (c) offline trading (d) direct trading

Description : The trading of a public company’s stock or other securities like bonds or stock options by individual with possession of material, non-public information about the security is called- (a) Insider trading (b) online trading (c) offline trading (d) direct trading

Last Answer : A. INSIDER TRADING

Underlying the construction of intelligence tests is the assumption that the people to be tested Options: A) Are of normal intelligence B) Are of the same stock from the biological point of view of heredity C) Have gained the same amount of knowledge D) Can be measured as to intelligence without undue interference from the factor of differences in experience

Description : Underlying the construction of intelligence tests is the assumption that the people to be tested Options: A) Are of normal intelligence B) Are of the same stock from the biological point ... ) Can be measured as to intelligence without undue interference from the factor of differences in experience

Last Answer : D) Can be measured as to intelligence without undue interference from the factor of differences in experience