Generally, an employee stock option is a right that a company grants an individual to purchase a specific number of shares of its stock at a set price during a specified period.

Example: You receive a grant of 1,000 options with an exercise price equal to the market price on the date of grant. You will make money if the stock price goes up after grant. You have 10 years in which to exercise your options to obtain ownership of the 1,000 shares of stock. Review your stock plan document for details on exercise prices, vesting, exercise procedures, and the impact of termination on your stock grant.

Two Types

Companies grant two kinds of stock options:

Summary Of Core Features To Understand

Learn more about each of the following core features of stock options in the related sections of this website:

Got another minute? In just 60 seconds, the myStockOptions editor-in-chief runs through the top 5 things to know about your stock options: