What does it mean to exercise a stock option. Jul 27, - "In the money" means that if you exercise a stock option you make money. For example, suppose a stock sells at $10 a share and you have the option to buy it for $8 a share. If you exercise your option, you have an immediate gain of $2 a share. On the other hand, if a stock sells for $10 a share and you.

What does it mean to exercise a stock option

Stock Options (Issuing & Exercising Options, Compensation Expense, Paid-In Capital Options)

What does it mean to exercise a stock option. Jan 21, - You are likely to incur an AMT if you exercise your options after their fair market value has risen above your exercise price, but you do not sell them. The AMT you are likely to incur will be the federal AMT tax rate of 28% times the amount by which your options have appreciated based on their current market.

What does it mean to exercise a stock option

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