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Financial Lingo – 5 Basic Stock Option Terms

Financial Lingo – 5 Basic Stock Option Terms

Photo credit: Shardayy

We have introduced many different types of stock options in the last few weeks and while you may have an understanding of the options themselves, we understand how confusing it can be to take in all the financial lingo and information without an introduction to some of the basic terminology. Here we go:

Strike price: The strike price is the amount which you agree to pay at or after a certain date.

Exercising options: When you’re exercising options, you are choosing to use your right to purchase the stock option that has been offered to you.

In the money: The value of an option or stock “in the money” is worth something in the stock market.

Vesting: A vesting period is the amount of time in which an employee does not have control over the option and cannot sell or transfer it.

Liquidity: Liquidity refers to how quickly a stock option can be turned into cash value.

These terms are only five of the hundreds of terms used in everyday financial lingo. While we have only introduced five terms, these five will set you on the path towards fully understanding your stock options and what they mean to you on a personal financial level. If you or anyone you know is in need of further assistance please contact Stock Connections, we are here to help you.

Stock Connections specializes in working with San Francisco Bay Area companies that are involved in mergers & acquisitions, are raising capital, or creating stock option or other equity plans. We help start-up, private and public firms become – and remain – SEC-compliant. Stock Connections’ services are designed to help both start-ups and established firms comply with SEC and other regulations in their equity compensation programs. If you or anyone you know is looking to get involved with any of the above, we encourage you to contact us today!

 

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