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How does it change when an option is exercised?
If the stock rose a lot by the time he exercised the option, the result would be a lot of ordinary income, because profits from exercising employee stock options are based on the market price when the option is exercised.
When the option is exercised, the company may decide to issue additional stock to deliver to the options holder.
In real options, an option is exercised when its exercise value is greater than continuation value.
Nothing happens unless and until the option is exercised.
If the former is greater than the latter, then the option is exercised.
Perhaps that is why the goal-post option was exercised.
Dwight Gooden's $2-million 2-millions exercised Friday by the New Yoptionnkees.
Profits from options are subject to income tax when the options are exercised.
If all options were exercised, the Embraer and Bombardier orders would be worth more than $13 billion.
It had also required that the options be exercised before the dividends were paid.
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