I was given 1000 options contracts with a $21 strike price, the stock is currently trading at $50.
If I were to exercise my math would be 1000*100 =100,000 * 21 =$2,100,000
The current value of my options if exercised would be 5 million in stock. Therefore a 2.9 million gain.
I currently see on the website the options are worth $29,000 which makes far far more sense.
In conclusion I know my math is wrong but can someone help me where, it’s clear I should not be multiplying by 100 but I am confused on why? I thought all options contracts are = 100 shares are grants/bonuses different?
Need some help understanding my companies option grants.
byu/Bobsagit14 inoptions
Posted by Bobsagit14
5 Comments
So the options should be worth (at least) $29 a piece if what you say is true.
29×100 then x1000 contracts.
Are you sure it’s 1000 contracts and not options on 1000 shares at $21? The latter is what is usually done.
Are you sure it’s 1000 contracts? Not 1000 equivalent shares?
Employee stock options are generally listed 1:1. The 1,000 options you have represent 1,000 shares.
Employee stock option grants are usually quoted in individual shares. So your 1,000 grant most likely means rights to buy 1,000 shares total, not 100,000 shares. However, consult the terms of the agreement to learn this. I’m sure your company benefits department has it.
At a $21 strike with the stock at $50, the intrinsic value would be:
($50 – $21) × 1,000 = $29,000
The 100x multiplier applies to publicly traded listed option contracts, not most employee grants.
Usually company stock options are shares. It’s an “option” to buy stock at a certain price. It’s not a stock option and has nothing to do with the options market.
So, it sounds like you have the option to buy 1000 shares at $21. You currently have a $29,000 gain just like it says.