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Exercising Employee Stock Options
Companies are going out of their way to offer employee stock options besides the regular salaries that employees get. It is a way to keep employees motivated and to bring about a sense of ownership among employees who end up having a stake in the company and hence work harder to ensure that their company is profitable. |
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An employee always has the option of exercising employee stock options and when he decides to do so, he has the following options in front of him.
- You can hold on to your stock options if you think that the stock price will rise over a period of time. You can wait to exercise your employee stock options till you the price of the stock is more than the price you would be buying the stock at. However, you should be careful with the waiting as stock options expire after a certain period of time.
- You can exercise your stock options to buy the shares and then hold onto the shares. This way you will be entitled to the dividends paid out by your company and there is a chance that the price of the shares would increase substantially and you can sell them off.
- You can exercise your stock options to buy the shares and then sell just enough shares to cover the cost of executing the stock options.
When it comes to exercising employee stock options, you have these three choices. Having employee stock options is a great way of having access to potential money provided your company is doing well.
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