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BloGitud Stories : Stock Options In Five Questions


I’ve noticed that the word Stock option is everywhere these days, and I’ve also noticed that when people read this word , they don’t know what it means , this was exactly my situation few days before , but I managed to read some economic books to find what It  meant .

And as these books are quite boring I’ve tried to write this article  to give you the explanation in five question of what are stock options :

Let’s learn what are stock options in five questions :

1 –To whom are stock options intended?

Stock options are mainly intended to employees, usually executives of the companies working with this system, as they demand huge salaries that can’t be paid by startups .

2 – How does this work on?

The employee of a company receives a kind of purchase order to acquire the shares later at a price already fixed, sometimes much lower than the actual share price.

3 – Why stock options?

Giving stock option prevents the company from giving big amounts of “cash”.

4 – What is the risk of stock options?

If the price falls below the price set by the option, the employee may waive his option: he earns nothing but loses nothing.

5- What’s good side of stock options

Generally stock options can help their owner make a lot of money and this through  stock option trading , executives of companies such as Google or Microsoft generally prefer to be paid in stock option as they know that the latter gain value easily , buy stock option trading is not as easy as it seems and there are a lot of examples of people who have lost everything .

But of course this doesn’t affect the reliability of stock options as in most of the cases, people who do not make benefits from them are those who do not use options trading mentoring .

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