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  1. I have a certain amount of stock options (NSO) that I can acquire at the startup I work for. For personal reasons, I will have to eventually leave the company. I do believe in the company, and the price at which I can exercise is very low.

  2. I am a complete newbie when it comes to stock options. I was convinced that I had to sell the shares to a third party in a given limited time, while instead it looks like that's just the exercise period.

My first question would be, does it make sense to hold onto stocks that might eventually have a certain value or will I find myself paying taxes year after year? I am based in Europe (Belgium).

My second question would be related to point 2. Does such a thing exist or was I confused? The agreement is about 30 pages in lawyer language so I am not super confident in what I am inferring.

Thank you.

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  • What country specifically? "Europe" is not a taxing agency (at least not income tax)
    – D Stanley
    Nov 17, 2021 at 22:00
  • Stock options can be a valuable part of your compensation but exercising them can be tricky from both a timing standpoint as well as a tax standpoint. You might do well to consult with a financial planner or similar professional in your area so that you don't end up costing yourself money.
    – jwh20
    Nov 17, 2021 at 22:04
  • @DStanley Belgium
    – the_camel_of_lies
    Nov 17, 2021 at 22:06
  • Belgium has a fairly unique (but favorable) set of tax rules for options. AFAIK you already got taxed at time of grant when you accepted the options. You should spend a bit of money and talk to a local tax advisor, this is to specific for the Internet in general
    – Hilmar
    Nov 18, 2021 at 22:03

1 Answer 1

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Ask yourself a couple questions -

Do you have enough capital to exercise those options?

Do you want to hold the stock past the option expiration date?

As long as the options are ITM (in the money) at expiration, you have the capital to exercise, and you want to hold long term then keep your options.

You could make more money off theta if the stock is/goes public and sky rockets at some point like GME. That would be a great time to sell those options early but other than that you can wait to exercise at expiration. Then hold the shares long term to avoid short term capital gains tax.

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