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Intrinsic Value
$0
Exercise Cost
$0
Total Value at Exercise
$0
Calculate the intrinsic value and exercise cost of your employee stock options (ISO or NSO).
$0
Exercise Cost
$0
Total Value at Exercise
$0
Subtract the strike price from the current share price to get the per-share spread, then multiply by the number of options to get intrinsic value. Multiply the strike price by the number of options to get the total exercise cost.
Intrinsic Value = (Current Price − Strike Price) × Number of Options
Intrinsic value is the built-in profit in your options if exercised today: the difference between the current market price of the stock and your strike price, multiplied by the number of options. If the current price is below the strike price, the options have zero intrinsic value (they're "underwater") and exercising them would mean paying more than the shares are currently worth.
Incentive Stock Options (ISOs) are only available to employees and can qualify for favorable long-term capital gains tax rates on the entire gain if specific holding period requirements are met (at least one year after exercise and two years after grant), though exercising ISOs can trigger Alternative Minimum Tax (AMT) even without selling. Non-Qualified Stock Options (NSOs) are simpler tax-wise: the spread at exercise is always taxed as ordinary income, similar to RSU vesting, with any further gain taxed as a capital gain when sold.
Exercising options requires paying the strike price multiplied by the number of shares, out of pocket (unless using a cashless exercise arrangement where shares are sold simultaneously to cover the cost). This exercise cost is distinct from any tax liability triggered by the exercise, which depends on option type and can be substantial for ISOs subject to AMT.
Stock options typically have both a vesting schedule (when you're allowed to exercise) and an expiration date (often 10 years from grant, or a much shorter window, sometimes 90 days, after leaving the company). Tracking these dates matters, since options that expire unexercised become worthless regardless of how much intrinsic value they held.
Intrinsic value is the difference between the current share price and the strike (exercise) price, multiplied by the number of options, if the share price is above the strike price. If the share price is below the strike price, the options are 'underwater' and have zero intrinsic value.
Incentive Stock Options (ISOs) can qualify for favorable long-term capital gains tax treatment if holding requirements are met, but may trigger Alternative Minimum Tax at exercise. Non-Qualified Stock Options (NSOs) are simpler but the spread at exercise is always taxed as ordinary income.
The exercise cost is the strike price multiplied by the number of options you're exercising. This is separate from any taxes owed on the resulting spread between share price and strike price.
Calculate RSU vesting value with the RSU Vesting Calculator, or check capital gains with the Capital Gains Calculator.
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