Finance glossary
Employee Stock Options
Definition
The right for employees to buy company stock at a fixed price.
Employee stock options grant the right to purchase shares at a preset strike price after vesting, letting workers share in upside if the stock rises above that price. Common at startups to conserve cash, they can be valuable but expire worthless if the stock stays below the strike.
In a sentence
Her employee stock options let her buy shares at $5, a windfall once the stock hit $50.
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