What are Stock Options?

Stock options give employees the right to buy a certain number of shares in the company at a fixed price at a future date. The price they use to purchase the stock is called the grant price. This price is typically the market price at the time the options are given.

When employees hold stock options, they hope the share price will go up so that they can exercise (purchase) the price at the lower, earlier price and sell it at the higher, market price.