Man ponders potential stock options as an employee.

Exercising Employee Stock Options

If you’ve been provided stock options as a part of your employment compensation or received stock options conditioned on meeting certain criteria as a part of your employment, understanding your rights as an option holder is important.

What is a Stock Option?

An employee stock option gives an employee the right to buy their employer’s stock at a pre-set price within a certain period of time. You can choose not to exercise your right, which is why you have the “option” to buy the stock. Your right to exercise the option might be a part of your employment agreement, or conditioned on meeting certain criteria (like a sales goal, for example).

Knowing When to Exercise Your Option

Knowing when (and even if) exercising your options is right, or even if the conditions needed to trigger your option exist depends on a variety of factors. In addition, protecting the value of your stock options or the shares you buy after exercising your options can involve complex investment strategies.  If you have questions about your rights, you should contact an experienced Los Angeles employee stock options attorney before making a decision.

As an employee, it is important to know that even though it is your right to sell shares of stock acquired by exercising your options, you may face pressure from your employer not to sell the shares. You also should understand that exercising a stock option can have tax consequences that can affect how to treat your option, and you should consider consulting a tax professional beforehand.

Call a Los Angeles Securities Lawyer Today

If you suffered losses relating to your employee stock options, or were pressured into holding shares that you bought with your stock options, you may have certain legal rights that require your immediate attention.

Contact an experienced Los Angeles securities attorney today for a consultation to discuss your rights and options.