But it can also be risky because there's no guarantee you'll make a profit. Narrator: This gives your shares time to potentially gain value. ![]() If the market price dips below your award price, your shares will lose value. The word "HOLD" fades away and is replaced by a blue screen that has an icon of a stock certificated on the left. Narrator: "Hold" means buying your shares and keeping all of them. The frame zooms in on the monitor that says "HOLD." The woman stops and looks up at the monitors. The two new monitors say "SELL" and "SELL-TO-COVER," respectively. The woman resumes walking, and next to the monitor saying "HOLD," two other monitors come into view. There are three common ways to exercise: hold, sell, and sell-to-cover. Do you want cash to spend? Or would you rather have company stock? Narrator: It also helps to think about what you want out of your exercise after it settles. The red circle animates to show an icon of a certificate, and the woman starts walking again. Narrator: When making that decision, it's important to consider the value of the stock price, when your options expire, and your personal or financial tax situation. The word "HOLD" appears on a monitor mounted near the windows. The three circles then animate and merge together under the red circle featuring the money. The one on the left is navy with a bar graph the one in the center is light blue with a calendar icon and the one on the right is red with three dollar bills. Three circles representing thought bubbles pop up above her head. Then she pauses and moves her hand to her chin as if in thought. And you'll really want a plan for what you'll do with them before you exercise. Narrator: Exercising options means purchasing shares of your company stock. She arrives at the top of the escalator and continues walking through the terminal. Purchasing your options of company stock-before they expire Narrator: Once your options are vested, you have choices to make about when and how to exercise them.Īs the woman passes the VESTING poster, she nods as if in agreement. This means earning your stock options over time. You earn your stock options over time, through a process called vesting. Narrator: No matter how much the stock price in the market might increase, you can still buy shares at your award price. ![]() The fixed price you'll pay for your shares The woman studies the next poster and rests her chin in her hand, considering what she has just read. ![]() Narrator: They're the option to buy shares of your company's stock at a specified price-called the award price. The option to buy shares of your company's stock at a specified price-called the award price Narrator: It's important to know that stock options aren't actually stock. The woman steps onto an escalator going up, passing posters on the wall along the way. Because when the company does well, so do your stock options. Narrator: They're a way to share in your company's success. The woman continues walking through the airport terminal, passing other travelers who are looking out a window at the plane rolling by. And stock options can be an important part of that journey that can help you get where you want to be. Outside, visible through a window, an airplane taxies in from the right while a woman walks into the scene from the left, rolling her suitcase.įemale narrator: Investing is a journey. An animated scene inside an airport terminal.
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