What are Stock Options
December 31, 2009 at 3:45 am (Stock Options)
stock options are a contract between two parties that expires at an agreed-upon time in the future. The contract purchaser is buying the right, but not the obligation, to buy (a “call” option) or sell (a “put” option) an asset (the “underlying”) at a specific price, on or before the agreed-upon date. The contract seller is accepting the obligation to take the other side of the transaction.
Employee Stock Option are typically offered as an incentive to work for a company ..or awarded as a bonus to employees with tenure in the company.. The same guidelines apply in the above statement with the exception that Employee Stock options are granted. Not purchased…and also u have to generally hold on to the for a period of 5 years before you are able to excercise.
