4 thoughts on “My First Infographic! An Introduction to Option Terminology”

  1. Hey Gila! Cool infographic. Very informative. I didn’t know most options expire after ten years and the right to buy the share is lost. Good lesson for this Millennial!

    1. Bear in mind that the rights to buy the share are usually linked to continued employment. So if you leave after year five, and everything is vested, you will probably only have three months to exercise, and not five years through expiration. Exceptions can be made, but that is normally going to be for someone with a lot more negotiating clout (e.g. CEO) and not the average or even senior employee.

      If you are working at a company and the options are set to expire, if the options are really cheap, it may be worth your while to just exercise. Alternatively, the Company can issue you a new, fully vested grant. In the US, however, that will need to be at the CURRENT fair market value (in order to be tax advantaged) which may be higher than the original grant. (But of course, that isn’t always the case, for many reasons).

    1. Thank you! I keep thinking I should try out Pinterest but I’m not sure how well my materials suit that format. 🙂

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