Exercise an stock option grant

Exercise a stock option grant

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If you've vested shares of a stock option grant, you have the right to exercise (To make use of a right available in a contract. For example, if an employee holds a vested stock option grant, the right is exercised when the employee purchases the corporation's shares at the agreed-upon price designated in the contract (often referred to as the strike price).) the vested (The right an employee acquires by length of service at a corporation to receive employer-contributed benefits such as stock option grants, employer contributions to a retirement plan, or profit-sharing plans.) shares. That means that you agree to purchase shares of your company's stock at the strike price (The price at which a stock can be purchased as defined within a stock option grant. For example, if an employee holds a stock option grant to by 10 shares of XYZ at a strike price of $50, the employee can purchase shares of XYZ for $50/share even if the stock has a market price of $100.) of your option grant. When you exercise shares, you can either sell the shares immediately and collect the cash proceeds less any income taxes, or you can use cash to buy the shares at the strike price and continue to hold them.

1 Go to Account Register for the employee stock option account in which you want to exercise shares.

How?

1 On the navigation bar (The strip at the top of the Money screen where you can click to go to the different areas in Money.), click Accounts.

2 At the top of the left pane, click the down-arrow

, and then click the account you want.

If you don't see the account you want, look for it under Other Open Accounts or Closed Accounts.

2 Click New in the transaction form below the register. Enter the following information in the form as follows:

Date Enter the date of the stock option exercise.
Investment Choose the stock option grant from the drop-down list. Be careful to choose the grant, NOT the actual company stock (for example, select XYZ 93 grant, not XYZ).
Activity Enter Exercise.
Quantity Enter the number of shares you want to exercise.
Price Enter the per-share market price of the stock.
Commission Enter the amount your broker charged to make the exercise.
Total Leave this blank. Money calculates the total automatically. (Market price û strike price û commission = total)
Transfer to Use the associated cash account for this stock option account.
Memo Enter anything you want.

3 After entering the exercise transaction, go to Account Register for the associated cash account (if your stock option account is "ABC Stock Options," the cash account will be named "ABC Stock Options (Cash)).

4 Click New on the transaction form at the bottom of the screen, and then click Withdrawal.

5 Enter the income tax paid as a result of exercising the shares. Usually your employer deducts this from your cash proceeds when you exercise.

6 See the following if you're selling or buying exercised shares.

If you're selling all the exercised shares and receiving cash:

The net proceeds of the exercise shares will be in the associated cash account. If you want to transfer them to another account such as checking, go to Account Register for the associated cash account, and click Transfer at the bottom of the screen and enter a transaction as you normally would.

If you're buying the exercised shares and holding them:

1 Go to Account Register and select the investment account where you want to track the stock.

2 Click New at the bottom of the screen.

3 In Date, enter the date of the option exercise.

4 In Activity, enter Buy.

5 In Investment, enter the name of the stock (not the grant name).

6 In Price, enter the market price of the stock on that day. That price will be your cost basis.

7 In Transfer from, enter the associated cash account for the stock option grant where you previously held these shares.

8 Fill in the rest of the fields, and then click Enter.

The shares will now appear in the Investment Portfolio and be reflected in your net worth.

How do I enter a stock option grant?

What are stock option grants?

How do I convert stock options that IÆve entered in previous versions of Money?

How do I see only my vested shares in the Investment Portfolio?

Stock option grant frequently asked questions.