> 1. If you're granted options at price X, and the new share price is lower than X, you're under no obligation to exercise your options. So no real financial lo

> 1. If you're granted options at price X, and the new share price is lower than X, you're under no obligation to exercise your options. So no real financial loss or cost to you. > 2. If you're granted options at price X, and the new share price is higher than X, you're still under no obligation to exercise your options. So it's up to you now. The payout on a call option is min(exercise - strike, 0). If you are granted options and X and the new share price is lower than X your options are now worth 0[1]. If the price is higher than X, you have lost some function of the volatility, time to expiry and Price_new - Price_old. In both cases there is a real mark to market financial loss to you even if you haven't yet crystallized that loss by exercising (which of course you would never exercise if the value was zero). [1] Actually very close to but not exactly zero because of the vol and the time to expiry. They could get above water again.