The Financial Advisor’s Guide to Understanding Your Stock Options

A Guide to Incentive and Non-Qualified Stock Options

How do stock options work? Employee stock options can have a lot of upside, but without proper planning, the tax and financial consequences can be severe. Download this guide for tips and strategies on how to maximize the benefits of your stock options and manage the risks that equity compensation can bring investors.

The Incentive Stock Option and Non-Qualified Stock Option Guide will cover:

  • How stock options work
  • Stock option terminology
  • The taxation of ISOs and NSOs
  • When to consider exercising and selling
  • What happens to stock options after a sale or IPO
  • Vesting of options
  • Incentive stock options vs nonqualified stock options
  • What to expect after a merger or acquisition
  • What happens to stock options if you leave your job?
  • Public and private company considerations
  • Risks of holding company stock and diversification strategies
  • Investing a windfall
  • Integrating the proceeds into your financial plan

Do you have Restricted Stock Units instead? We’ve got a guide for RSUs, too!

Stock Options Explained ISOs and NSOs

Financial advisor to help you manage your stock options

The Darrow team of CFP® professionals can work to help you:

  • Discuss your short and long-term goals to identify how to best utilize stock options in your financial plan
  • Understand your risk tolerance to help ensure that a concentrated stock position is adequately diversified when looking at your complete financial picture
  • Consider how your stock options may fit into your retirement planning strategy
  • Coordinate with your CPA to understand the projected impact on your tax situation
  • Review your career goals and discuss how vested and unvested stock options may be treated if you leave the company or retire
  • Explore the viability of alternative strategies such as a cashless exercise of stock options
  • Quantifying your financial risk with a stress test analysis
  • Determine whether you’re considered an insider at your company and how that may affect your options transaction

To learn more, please contact us today.