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optionee Archives - Help with mergers & acquisitions, raising capital, creating stock options and other equity plans

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Exercising a Stock Option – How do I do it?

Exercising options can money to someone's hands.

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Exercising a stock option can be just as confusing as the initial introduction into your employee stock option purchase plan. The terminology can be intimidating and the process can be tedious, but with the proper level of preparation and an attention to detail, it should be smooth sailing. When exercising a stock option there are three ways to do so, they are:

1. Cash: If you are exercising an option with this method, you must have enough money in your brokerage account to cover the cost of any applicable taxation and the exercise price.

2. Sell all: This method involves instructing your broker to sell all exercised shares and requires no out-of-pocket expenditure on the part of the optionee (you).

3. Sell to cover: This form of exercise is when some portion of exercised shares are sold. The amount sold is just enough to cover the option price and total taxes. The shares that are sold are given to a broker while the unsold shares are given to the optionee.

Here at Stock Connections, we specialize in employee stock options and equity compensation plans. If you or anyone you know is hoping to learn more about exercising stock options, feel free to contact us today. We are ready to help you understand your options and move forward.

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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