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Stock Options For Dummies

ISBN: 978-0-7645-5364-6
336 pages
July 2001
Stock Options For Dummies (076455364X) cover image

Description

If you’re like the majority of the estimated 12 million employees in the U.S. who have stock options as a key component to their compensation packages, you have a vague notion, at best, of how options work and what they can mean to your financial well being. What’s the vesting schedule for your shares and how will their strike price be set? What type of stock option grant will you receive, an ISO (incentive stock option) or an NQSO (non-qualified stock option)? What tax rules apply to your option program? Your financial future could depend on your knowing the answers to these and other questions regarding your company’s stock option plan.

Confused by all the brouhaha surrounding stock options? Let expert Alan Simon demystify this often-confusing investment vehicle for you. Featuring clear explanations of how your stock options might make you money—or not—this friendly guide fills you in on what you need to know to:

  • Understand different types of stock options
  • Read and find traps in your stock option agreement
  • Evaluate the pros and cons of company investment vehicles
  • Assess vesting schedules and tax laws
  • Tap Web resources

Simon demystifies the jargon, rules, and tax consequences of stock options. He provides a realistic picture of what to expect from your options, and he helps you see past the hype to understand what your employer is really offering. Important topics covered include:

  • What you need to know before accepting a compensation package that includes options
  • Developing a stock option philosophy and clear-cut goals
  • Knowing whether you’re being treated fairly by your company
  • Making sense of the language of stock options agreements
  • Getting a handle on key restrictions on how you exercise your options
  • Stock option valuation
  • Tax rules and how they apply to different types of options
  • How stock options can be affected by changes at your company

Stock Options For Dummies is the only guide you’ll need to get the most out of this important investment vehicle.

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Table of Contents

Introduction.

PART I: The Fundmentals of Stock Options.

Chapter 1: Stock Options: What You Need to Know Right Off the Bat.

Chapter 2: Taking Your Chances: Getting Rich or Going Broke.

Chapter 3: Knowing What Kind of Stock Option Situation Is Best for You.

Chapter 4: The Big Guys and The Big Picture.

PART II: Details, Details: What You Must Know about Your Stock Options.

Chapter 5: Deciphering the Legal Language of Stock Option Agreements.

Chapter 6: Exercising Your Stock Options.

Chapter 7: Differentiating Pre-IPO and Post-IPO Stock Options.

Chapter 8: No Trading Allowed! Lockups and Blackout Periods.

Chapter 9: Finding Stock Option Information Online.

PART III: Money!

Chapter 10: Determining What Your Stock Options Are Really Worth.

Chapter 11: Stock Options and Your Overall Portfolio.

PART IV: Pay Up! Taxes and Stock Options.

Chapter 12: Understanding the Basics of Taxes and Stock Options.

Chapter 13: Nonqualified Stock Options and Taxes.

Chapter 14: Incentive Stock Options and Taxes.

PART V: Changes and Special Circumstances.

Chapter 15: The Alternative Minimum Tax and Stock Options.

Chapter 16: Acquiring or Being Acquired: Dealing with Corporate Change.

Chapter 17: Trying to Predict What Will Happen to Your Stock Options.

Chapter 18: Leaving Your Job: What Happens to Your Stock Options?

PART VI: The Part of Tens.

Chapter 19: Special Stock Option Circumstances.

Chapter 20: Ten Signs That Your Stock Options Will Be Worth a Lot!

Chapter 21: Ten Signs That Your Stock Options Will Probably Be Worthless!

Chapter 22: Ten Things to Look for in Your Stock Option Agreement.

Index.

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Author Information

Alan R. Simon, author of Data Warehousing For Dummies, is a manager at Deloitte Consulting. Alan has experienced every side of stock options in public and pre-IPO companies, large Fortune 500 corporations, and small consulting firms.
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