Should I exercise my 'in-the-money' stock options?

When your employee stock options become 'in-the-money', where the current price is greater than the strike price, you can choose from one of three basic sell strategies: Exercise your options, then hold the stock for sale at a later date (exercise and hold); hold your options and exercise them later (defer exercise); or exercise your options and immediately sell the stock (exercise and sell). This calculator will help you decide which choice will likely maximize your after-tax profits.

Stock Option Assumptions

Years until option expiration date (0 to 20)

Total number of options (0 to 999999)

Current price (per share) ($)

Strike (grant) price (per share) ($)

Anticipated annual return on stock (-50% to 50%)

Annual dividends (per share) ($)

Taxation And Investment Assumptions

Anticipated annual return on alternative investment (-50% to 50%)

Marginal tax bracket (0% to 75%)

Long-term capital gains tax rate (0% to 75%)

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