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 
Total number of options 
Current price (per share) ($) 
Strike (grant) price (per share) ($) 
Anticipated annual return on stock (%)help
Annual dividends (per share) ($) 
Taxation And Investment Assumptions
Anticipated annual return on alternative investment (%)help
Marginal tax bracket (%)help
Long-term capital gains tax rate (%) 
The information provided here is to assist you in planning for your future. Any analysis is a result of the information you have provided. Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice.

Any rate of return entered into the interactive calculator to project future values should be a reasonable average return for the period. Rates of return will vary over time, and generally the higher the rate of return the higher the degree of risk.

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