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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374 views

What is an exercise price in regards to restricted stock awards?

What does an 'exercise price' refer to in regards to a restricted stock award? I was under the impression that the exercise price was how much a stock can be bought for, but it doesn't seem to make ...
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If I exercise underwater ISOs, can I claim a loss?

From what I understand, if I exercise in-the-money ISOs, I'll be taxed on the supposed gains, even if the stock isn't tradeable (because, for example, it's stock in a privately-held company). Does ...
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Black & Scholes article : option pricing

I am currently reading the famous article by Fischer Black and Myron Scholes called 'The pricing of Options and Corporate liabilities'. Just at the beginning of the article, they go on and explain ...
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1answer
212 views

Employee stock option plan with undefined vesting?

As an employee, I have received stock options from my company. However, about vesting, it says only that the board determines it. There is no further info, no vesting period is stated, no further ...
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5answers
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Confused about employee stock options: How do I afford these?

I'm confused about stock options. The numbers in the following story are fictional because I'm keeping the actual offer confidential. This is an American private company with a promising future: ...
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1answer
237 views

Exercising stock options in a private company when the strike price is higher than current FMV

An employee leaving our Private Subsidiary wants to exercise his stock options, despite his strike price being higher than the current valuation ($1.00 vs $0.84). Was wondering what the tax ...
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803 views

How can I estimate the value of private stock behind employee stock options?

I'm considering an offer with generous options. I have pretty high risk tolerance, so I'm just trying to estimate the expected value of the options. To the extent possible, I want to base this on the ...
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1answer
270 views

How can I track the value of options live in my portfolio

With stocks I can enter price and amount into most applications and they allow me track the total Profit / Loss live. Are there any ways to do this with option positions? I was considering entering ...
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Capital losses on early-purchased stock?

If I exercise an early purchase clause on employee incentive stock options to go ahead and purchase the stock and the company later goes bust, can I take capital losses against that stock?
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If my put option reaches expiration on etrade and I don't log in to the site will it automatically exercise if it's in the money or be a total loss?

I ask because suppose you don't manually exercise and expiration day hits and it's in the money..do you lose it all or is the in the money gain automatically credited to your account?
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Can you write a put option without sufficient funds to meet the potential obligation?

When writing a put option does your account have to be funded so that if the buyer exercises the right to sell you can meet your obligation, or can you write the put option without the funds to meet ...
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1answer
2k views

What is the correct way to report incentive stock options (ISO) on federal taxes?

In 2011, I exercised incentive stock options and received a 3921 Form (I did not receive a 1099-B). However, judging by my W2, it looks like my exercised stock option income was included in Box 1 of ...
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What are my risks of early assignment?

I have started writing covered puts and calls recently. Everything I read talks about the risk of early assignment of your position, but I don't really understand how often this happens. It seems that ...
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What happens to options if a company is acquired / bought out?

I have some out of the money options with pretty far off expiry dates (Jan 2013, for example). What happens if the underlying company is acquired before then, while I'm still holding the options? Do ...
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4answers
194 views

When trading put options, is your total risk decreased if you are in a position to exercise the option?

I've been trying to work this out for a while: Say I own stock X right now trading at $250. If I were to buy a put option on stock X and I pay $5 for the option to sell at $250, If the stock ends ...
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Can a put option and call option be exercised for the same stock with different strike prices?

Refer to http://finance.yahoo.com/q/os?s=PEI&m=2011-10-21 If I were to sell a call @ 15 and sell a put @ 13, come October 21, is it possible for BOTH of the options sold to be exercised?
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Covered calls: How to handle this trade?

I bought XNPT (Xenoport) a couple of weeks ago at 6.93 I turned right around and sold the Apr 16 call. $8.00 strike and collected 1.50 in premium. Today I get a great surprise that XNPT has rocketed ...
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What are the tax implications of exercising options early?

Say you have the following situation: You have pre-IPO stock options Half of the options have vested, the other half will vest over the next 2 years Your strike price is S The fair market value of ...
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9answers
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Why are American-style options worth more than European-style options?

Why are American-style options worth more than European-style options? I realize I can exercise American-style options anytime before the expire, but I can only exercise European-style options ...
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Any advantage to exercising ISO's in company that is not yet public?

I have ISO's in a private company and am trying to decide whether there is any advantage in exercising them. The price is low enough and my confidence in the company is high enough that I am ...