What if the stock price is lower than my option price?

February 28, 2006

Date: Thu, 02 Feb 2006
From:   Angela

Hi! Great web site. I have a question.

My husband works for Verizon. He has NSOs for 400 shares at $54 and 213 shares at $44. The price today for Verizon shares is $31 per share. Can he cash his options in at $31?

Thanks so much for your time!


Date:   Wed, 08 Feb 2006

Hello Angela,

The description commonly used for your husband’s options is “underwater”. He can buy shares on the stock market for less than the option price. In this situation, the options will only become valuable if the market price of the stock increases to be more than the option price.

If you and your husband want to buy Verizon shares at $31 per share, simply place an order with your stock broker.

Good luck!

Mike Gray

For more information about non-qualified stock options, request our free report, “Executive Tax and Financial Planning For Non-Qualified Stock Options”.

Comments are closed.