S2 EP14 - Understanding Company Stock Options Part 2

We break down how employee stock options actually work, from strike price and vesting to the moment taxes show up on your W-2. We also explain how exercise timing, holding periods, and cashless exercise can change your real take-home value. 

• Stock options versus RSUs and why options give you control over timing 
• Strike price, vesting schedules, and why the strike price stays fixed 
• Expiration timelines and why waiting can be a feature and a risk 
• NSOs versus ISOs and why the tax rules differ 
• How the spread at exercise becomes ordinary income for NSOs 
• The 365-day rule and short-term versus long-term capital gains 
• Why your tax bracket and other income change the best exercise plan 
• Using lower stock prices to reduce the taxable spread 
• Cashless exercise mechanics and when it may help 
• Why a personalized plan beats copying a coworker’s strategy