Stock Option Expenses

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Stock option expenses can either come from the fees and commissions of an award stock option or the option contract fee for a regular options contract. Pay the fees associated with a stock option when exercising the option with advice from an investment manager in this free video on stock options.

Part of the Video Series: Stocks & Mutual Fund Investments
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Video Transcript

OK stock option expensing. Two types of options I want to talk about. One is an award option where you may work for a company and they're going to give you the option to own stock in the future going forward and the expenses there are going to be pretty straightforward. You're going to look at any commissions or fees that are going to need to be paid to own that option in the future. Any cost upfront and also comparing your option price against the trading price in the secondary market. It may or may not be to your benefit to exercise that option. The other is a regular options contract. And all options contracts not only have in the contract an agreed upon sale or purchase for that equity, but there's also a contract fee that is paid as well. So that's going to go against your, that's going to work against your eventual gain or loss. So the fees on the option contract need to be taken into consideration as well as any trading or any other fees you may be having with your brokerage house that is managing that sale or purchase.

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