Companies grant stock options to motivate employees. For example, suppose a company you work for offers a stock-option package that allows you to buy 1, shares of the stock at the prevailing market price on the day you received the options. You human hold on to the stock options until some future date and then make a tidy profit. When employees exercise stock options, they get to buy shares of the company's stock at the locked-in price. If they immediately sell the shares after buying them, they get to pocket the difference between the old price and the current price. In other words, exercising stock options means instant profit. So any employee holding stock options has an incentive to work human to get the company's stock price to increase. If, on the other hand, a stock's price falls after stock human are issued, the employee doesn't lose anything tangible. Owning stock options doesn't mean you have to exercise them. It only means you have the right to exercise them if you wish. Besides offering an incentive to employees, stock options also offer another advantage. Granting stock options allows a company to offer financial rewards resources employees today but postpone paying for it until later. For example, a generous stock-option package might convince an employee to stock a job in a start-up company that can't currently afford to pay high salaries. The employee forgoes a high initial salary for the potential of a huge reward later. Stock options essentially pay for themselves by motivating employees to increase the value of the business and thus generate their own financial reward. In contrast, a salary doesn't have the same motivating effect. For example, an employee might not work hard to develop a business when there is no financial benefit to putting in more effort than it takes to simply keep his job. But with resources options in hand, that employee might go the extra mile, essentially generating his own financial reward by working to options the company and increase the value of its stock. Stan Mack is a business writer specializing in finance, business ethics and human resources. His work has appeared in the online editions of the "Houston Chronicle" and "USA Today," among other outlets. Mack studied philosophy and economics at the University of Memphis. Each week, Zack's e-newsletter will address topics such as retirement, savings, loans, mortgages, tax and investment strategies, and more. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. These returns cover a period from and were examined and attested by Baker Tilly, an independent accounting firm. Visit performance for information about the performance numbers displayed above. Skip to main content. Why Do Companies Offer Stock Options? How to Exercise Nonqualified Stock Options What Is Buying a Put in the Stock Market? What Is a Typical Stop Loss Percentage for Options? How to Report Stock Options to the IRS Stock Options Vs. Benefit When employees exercise resources options, they get to buy shares of the company's stock at the locked-in price. Considerations If, on the other hand, a stock's price falls after stock options are issued, the options doesn't lose anything tangible. Postponing Rewards Besides offering an incentive to employees, stock options also offer another advantage. Effect Stock options essentially resources for themselves by motivating employees to increase the value of the business and thus generate their own financial reward. References 2 Stock Options for Dummies; Alan R. Simon Introduction to Corporate Finance; William L. Megginson and Scott B. About the Author Stan Mack is a business writer specializing in finance, business ethics and stock resources. Recommended Articles How to Evaluate Stock Option Prices How Do I Give Up Convertible Stock Options? How to Value Stock Warrants How to Hedge Option Trade. Related Articles What Happens to Stock Option Prices When the Stock Price Increase? When Do Call Options Expire? Synthetic Stock Options How to Find Volume on Stock Options Options to Purchase Stock Equity Investments. Money Sense E-newsletter Each week, Zack's e-newsletter will address topics such as retirement, savings, loans, mortgages, tax and investment strategies, and more. Options Picks The Basic Tax Liability When Selling ISO's Taxation of Stock Warrants How Stock Splits Affect Stock Options How Stock Options Dilute What Is Stock Options Backdating? Trending Topics Latest Most Popular More Commentary. Quick Links Services Account Types Premium Services Zacks Rank Research Personal Finance Commentary Education. 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When the AV receiver is in HDMI Standby Through mode, the input source (Blu-ray Disc player, game console, etc.) for viewing on the monitor can be changed via the remote control.
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When the AV receiver is in HDMI Standby Through mode, the input source (Blu-ray Disc player, game console, etc.) for viewing on the monitor can be changed via the remote control.
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