stock-option-exercise

Vocabulary Word

Definition

'Stock option exercise' is when an individual decides to buy a company's shares that they have an option to purchase at a specific price. It's like cashing in a voucher to buy something at a special price.

Examples in Different Contexts

In employee benefits, stock option exercise refers to the action an employee takes to purchase shares at the predetermined price set when the options were granted. A benefits manager might say, 'Exercising your stock options allows you to buy company shares at a discount, potentially leading to profit if the stock value has increased.'

Practice Scenarios

Economics

Scenario:

The news suggests that a high volume of employees at that tech giant are exercising their stock options. This trend might impact their share value in the market.

Response:

Indeed, we need to watch the impact of the mass stock option exercise on the company's share value.

Finance

Scenario:

Given the recent success of this company, it might be a good timing to make the move on your investment portfolio.

Response:

Agreed. It is indeed the right time to exercise my stock options given their market performance.