<topic sku="core" tNum="288287" author="sallyh" xmlns="x-schema:hhTopicSchema.xml"><index><title>Exercise an employee stock option grant</title><category>investing</category><klink type="prcdr">How do I exercise an employee stock option grant?</klink></index>
<content>
<extend>
<tease>Why?</tease>
<reveal>
<p>You can <glossary>exercise</glossary> a <glossary tNum="287113">vested</glossary> stock option grant by purchasing stock at the grant <glossary>strike price</glossary>. You can then either sell the shares and collect the cash proceeds less any income taxes withheld, or continue to hold the shares.</p>
</reveal>
</extend>
<ol>
<li>Enter the stock option exercise in your investment account.</li>
<extend>
<tease><showme/></tease>
<reveal>
<ol>
<li>On the <emph>Investing</emph> menu, click <emph>Portfolio</emph>.</li>
<li>Click the stock option account.</li>
<li>Click <emph>New</emph>.</li>
<li>Enter the stock option grant information:</li>
<ul>
<li><emph>Investment.</emph> Click the stock option grant. Use the grant, not the actual company stock (for example, <emph>XYZ 2001 Grant</emph>, not <emph>XYZ</emph>).</li>
<li><emph>Activity.</emph> Click <emph>Exercise & Sell</emph>. If you are exercising and holding, follow the instructions below to record your stock purchase.</li>
<li><emph>Transfer to.</emph> Enter the account in which the proceeds will be deposited.</li>
<li><emph>Quantity.</emph> Enter the number of shares you're exercising.</li>
<li><emph>Price.</emph> Enter the price when you exercise the shares.</li>
<li><emph>Commission.</emph> Enter any fees or commissions.</li>
<li><emph>Total.</emph> This amount is optional. If you enter quantity and price, Money calculates the total.</li>
</ul>
<li>Click <emph>Enter</emph>.</li>
</ol>
</reveal>
</extend>
<li>If you are holding all or some of the shares, you need to also enter a purchase of the shares on the date you exercised your options.</li>
<extend>
<tease><showme/></tease>
<reveal>
<ol>
<li>In the left pane, click <emph>Investment Transactions</emph>.</li>
<li>Click <emph>New</emph>.</li>
<li>Enter the information, including:</li>
<ul>
<li><emph>Investment.</emph> Click the actual name of the stock, not the grant name. For example, click <emph>XYZ</emph>, not <emph>XYZ 2001 Grant</emph>.</li>
<li><emph>Price.</emph> Enter the market price per share that you paid for the stock. This price plus commissions will be your <glossary>cost basis</glossary>.</li>
<li><emph>Transfer from.</emph> Click the name of the account you used to pay for the stock, such as your checking account.</li>
</ul>
<li>Enter the remaining information, and then click <emph>Enter</emph>.</li>
