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"Price per option granted" versus "exercising price"?

Personal Finance & Money Asked on January 17, 2021

What is the difference between "price per option granted" and "exercise price" ?

Let’s say I received 10 employee stock options with a "price per option granted" = 0 Euro and the "exercise price" is 100 Euro.
Can I buy the shares for 0 Euro or for 100 Euro after the vesting date? I am little bit confused… Any help is highly appreciated. Thanks a lot in advance.

One Answer

The Exercise Price is what you have the option to buy the shares for after the expiry date (which may be the same as the vest date, but not necessarily). So you'll have the option to buy shares for 100 Euro at that time. Obviously if the price of shares is less than 100 Euro at expiry, then you wouldn't buy them and the options would be worthless.

My guess on the "price per option granted" is that's the price that you're buying the option for (in other words, they are given to you). It may be important for tax purposes, meaing if you were to sell the options before exercising them, your cost bases for tax purposes would be 0.

Correct answer by D Stanley on January 17, 2021

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