Questions tagged [option-exercise]
In options trading, the option holder has the right but not the obligation to buy or sell the underlying instrument at a specified price on or before a specified date in the future. Exercise means to put into effect the right specified in an option contract.
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If my ISOs are converted to NSOs, do I still have 90 days to exercise my vested options as ISOs?
Let's say I have a bunch of incentive stock options (ISOs) in a company that have vested but I have not exercised yet. If I were to leave the company, I have 90 days to exercise them with ISO tax ...
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I sold my earned incentive stock options back to my employer - how is the money taxed?
I recently sold my vested incentive stock-options back to my employer (i.e. so rather than having to spend $20,000 of my own money to exercise my options and make very little paper gain initially, I ...
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Confusion about options: can one exercise at any time?
I am at the beginning of learning about options. I am reading a book on the subject. I am in a chapter about selling covered calls. The book says:
Defensive covered call writers may prefer the ...
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Stock options and cash settlement
Lets assume I buy one long call option on AAPL and as the expiry day gets closer the option is in the money. If I decide to exercise that option will there be a cash settlement or a delivery of the ...
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How to know FMV of ISOs?
I'm researching when is best to purchase ISOs I've been vesting at a private venture-backed startup. My understanding is that when I exercise, AMT will trigger and I will have to pay those taxes based ...
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Does AMT affect cost basis of future capital gains?
Suppose I exercise 10k stock options for $1/share, and fair-market value is $2/share.
Normally, taxes are deferred until when I sell them. And when I sell, the basis for capital gains is $1/share.
...
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Why hold calls until expiration?
I am reading a book on options basics. I am in a chapter on selling covered calls. The author says that buyers of calls almost always hold the calls until expiration.
Why is this? Here's how I ...
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Exercising an out of the money option
Let's say I sell a call option and before expiration date, it is out of the money. The buyer would not exercise it normally. I am just curious as to what would happen to my account if he does decide ...
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No margin account and put expires ITM
This question is a followup to a recent and similar question on buying a put: When a long PUT expires in-the-money, whose shares are being sold?.
Suppose I don't have a margin account, and I buy a ...
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Should I exercise my stock options? [duplicate]
I am a new hire at a large private company that is undergoing some rapid growth. I hope to stay with this company for at least the next few years. At my hire, I was offered stock options equivalent ...
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Options and exercise
Why do people exercise call options early? If the price of the stock rises above the exercise price, the profit from selling the option would be greater than the profit from exercising the option and ...
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Call vs Puts: a short position can profit using both depending on strike price?
I'm confused about whether you want to own a call or put if you believe a stock price will go down.
Most articles have described owning Puts as betting the stock will go down, and calls as betting ...
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AMT Tax on Company Stock Options
I must exercise approx. $100k in company stock options in the 1Q19 as they are expiring. My estimated 2019 income is $235k. Any advice on minimizing AMT tax of 28% on the est. $175k in profit when I ...
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Understanding on closing an option
I have read that there are three scenarios when it comes to closing an option:
You can buy or sell to “close” the position prior to expiration.
The options expire out-of-the-money and worthless, so ...
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A beginner question on call option
I made my first options transaction. I believe that a stock that is currently trading around 25, will be in the 40s, come August - based on my research (I know the stock well, and I've invested in ...
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Exercise a stock option in a US-based company as a non US tax resident
I'm given 1000 stock options (all vested) at $100 strike price per option. Current stock valuation is $1000 per share. As I understand, if I exercise I'll pay $100K out of my pocket and I'll also get ...
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Is there a reason to exercise a stock option as soon as it vests?
Background: I am currently employed by a start-up that, so far, is doing really well. As part of my contract, I have stock options that will come available on a typical vesting schedule. A quarter of ...
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What is the Meaning of the Black-Scholes Value?
We are currently learning about the Black-Scholes Merton Model. I understand the process of finding the call option. However, I'm wondering what the answer actually means.
For example:
Stock Price = ...
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Can you keep exercised EMI options after leaving a company?
I'm fairly unknowledgeable regarding financial matters, so any help would be greatly appreciated.
I have been granted EMI options with my current employer, half of which have vested. The company is ...
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Wouldn't it always make sense to be an Option Writer (seller)?
I've read multiple times that options are rarely, if ever, exercised, and 90+% usually expire into nothingness.
If that's the case, wouldn't you always want to be an option writer? If nobody is ever ...
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Why is there a significant disparity between 409A valuation and fair market value?
I'm at an interesting juncture where I have the opportunity to exercise some ISOs at a startup, and I'm somewhat confused at the disparity between the two valuations.
In my case, I can exercise my ...
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Confusion about trading options
There is one thing I do not get about trading options (let's restrict this to calls), and no online resource I've come across seems to talk about the following scenario. There are 3 parties in this: A,...
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Find buyer for private stock?
I've got options to exercise "in the money" by March. However, I would like to sell part of the stock I will buy. The company is not publicly traded. In the agreement I've got the right to sell to ...
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Why exercise ISO/QSO early?
What advantage would there be to exercising incentive stock options early?
I understand that for lowest US income taxes, you have to wait 2 years after excising to sell.
But two years now vs. two ...
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How to determine option exercise limits?
I recently bumped up against the exercise limit for number of option contracts I could hold at once. I.e. a message saying I couldn't hold more than 500 when attempting to do a Buy to Open on Call ...
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How does reporting AMT for shares later sold as long-term cap gain work? [duplicate]
I'm unsurprisingly confused:
If I exercise ISOs in Jan 2017 and sell them in Feb 2018, how is income reported for AMT purposes and profit reported for cap gain purposes -- are BOTH reported on my ...
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What's the point of abandoning an in-the-money option? (i.e., not exercising it)
What's the point of abandoning an in-the-money option? (i.e., not exercising it)
(Related: Exercise an out of the money option)
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How can it be possible that only ~10% of options expire worthless, and only ~10% are exercised?
While researching stock options, I have read in many places that options meet the following ends with the following frequencies:
~10% expire worthless.
~10% are exercised.
~80% are traded away; the ...
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Do we always get back AMT money for stock options?
I'm thinking of early exercising my stock options. One of the reasons is that I won't have to pay alternative minimum tax (AMT) now (strike price is equal to fair market value).
But from what I ...
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Payroll taxes on exercised stock options
The company I work for was recently sold. As part of the buyout, non-qualified stock options held by certain employees were exercised and sold immediately to the buyer. Since multiple employees were ...
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Reason for "qualified" buyer requirements to exercise stock options/rights spun off from parent company?
Recently a company in which I own a few shares issued a bunch of options for a portion of their business which was not previously traded publicly. This subsidiary business will begin trading publicly ...
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Difference in Value between General American & European Options
I am trying to get a grip on the difference in value between American and European options. I have read up on and understand that the value of an American call option is equal to that of a European ...
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Is there anything to do immediately after exercising stock options?
I'm at a startup and I just exercised my incentive stock options. I believe I'll need to pay the alternative minimum tax (AMT).
Is there anything to be done this year or should I wait until tax ...
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Bid price... sudden Drop
I have a call option that is 45 day out from expiration. The stock price is sitting at about twice my strike price.
Why did my bid price dropped from $2.00 to .10 in one day?
Is my only option now to ...
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Unwinding unvested shares bought at different prices when departing a company in California
My company repriced their options and the price dropped. Let's say the price went from $5 to $2 (not actual numbers).
I'd early-exercised 75% of my grant at $5 and (later) exercised the remaining ...
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Option exercise timing / OCC operating principles (premarket)
Let's assume the following scenario:
American style long call option contract heavily in the money (CBOE)
Couple of days to expiration
Very high risk that underlying asset will fall sharply when ...
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Is this legal: going long on call options and artificially increasing the price of the underlying asset seconds before expiration?
Let's say I bought a particular call option and own the majority of it.
On the very last second (before the expiry date, seconds before the market closes), if I bought every single offer in the ...
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What happens to an options contract during an all stock acquisition?
Let's say for the sake of the question you're given the following scenario:
Company BIG is trading at $10/share
Company SML is trading at $40/share
BIG reaches an agreement with SML for an all stock ...
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Perform exercise-and-hold AND exercise-and-sell-to-cover?
Suppose I was granted 100,000 shares of ISO stock in a startup in the US with a strike price of $1/share and current valuate of $1.25/share. These shares are 100% vested when I leave the company and I ...
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Buying puts without owning underlying
I'm looking to buy puts for short-term option trading. My time horizon is a week to two weeks at most. I only ever trade the options - I never hold to expiration. When I attempt to buy a put, I get an ...
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Selling employee stock options now and waiting for Long Term Capital Gains or selling later
I've got some options that I'm looking to exercise and am trying to figure the best way to go about it. I always thought that exercising options and then waiting for long-term capital gains was the ...
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Can written options be exercised against you prior to expiry when they become "in-the-money"?
I'm talking practically. For example:
Suppose I write 10 contracts with strike $102 for 50 cents an option, with expiry two weeks from now, with stock price at $100. A week from now stock hits, say, ...
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Why buy a vertical spread if I could instead buy a naked call?
If I believe a stock will go up, say from a price of $100, and I wish to execute an options strategy that would make me money if the stock were to rise, why would I want to setup a vertical spread ...
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Question about option chain
https://beta.finance.yahoo.com/quote/GOOG/options?ltr=1&date=1516320000
OK, can't I just SELL "350 @ $395 and BUY "340" @ $391 and pocket $4 immediately and realize another $10 if and when the ...
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Buying stock options in private company
I have been working at a start-up company for the past 4.5 years in the US. The company is still private. It is not going to go public. The owners are looking to sell once they get a good offer. I don'...
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Call option- premium fall with rise in spot price
The premium of the below call keeps falling although the price is increasing and it still has more than a month until expiry. The current spot price is 392.
Shouldn't the in the money strike premium ...
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Is it best to exercise options shares when they vest, or wait
For my situation, is it better for me to exercise all my option shares whenever they vest (are exercisable), or is there any advantage to waiting?
What are the pros and cons?
What is the tax aspect, ...
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Stock options: what happens if I leave a company and then an acquisition is finalized?
If this situation occurs and I have 75% of my shares vested and I have a 60 day window to exercise the vested options upon termination (my choice not company's choice) can I reap the financial ...
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Options profit calculation and cash settlement
I have a question regardnig call options. For example:
108-strike AAPL options expiring Dec 24th are 83 cents. That means the cost of one contract would be 83 + 5 (commission) = 89 dollars ...
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Should I early exercise unvested ISOs when the FMV is above the strike price?
I have unvested ISOs from a job I started this year, and recent revisions to our policies have given employees the ability to early-exercise their options. However, it's been several months since my ...