2 ms·
> the ability to buy something as compensation While that is indeed the mechanics, really what you get is exposure to upside without exposure to downside. The
by phamilton 8y ago
> the ability to buy something as compensation
While that is indeed the mechanics, really what you get is exposure to upside without exposure to downside. The fact that it's options is a (probably outdated) structure that is beneficial from a tax perspective.
- jonny_eh 8y agoOnly if the company IPOs. More commonly you buy the options, pay taxes on them, then the company goes under before you make your money back.
- phamilton 8y agoWhile that is common, that is unrelated to my point. Being given an option grant does not expose you to downside. Exercising the grant can result in a loss, sure, but exercising is not necessary to have exposure to upside. As the OP points out though, 90 day windows force you to exercise (and be exposed to downside) or forfeit your upside.