What Are Stock Options? And Do You Want Them?

Stock options are the right to acquire shares of stock at a set price (the “strike price”) for a specified period of time. For instance: An employer might grant an employee the right to acquire 100 shares of stock at $10 a share for a five-year period. If the price of the stock goes up to $25 per share during this five-year period, the value of the right to purchase a share of stock at $10 also increases.