The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “Do you pay capital gains on stock options?” And we’re specifically talking about stock options that an employee might get in a company. If you’re an employee of a company and you get stock options, how do they get taxed as gains? Well, there’s two kinds of stock options for employees. There’s nonqualified stock options which are called NSOs and those are usually granted to people who are employees, advisors or potentially consultants to the company and then you have other ones which are incentive stock options which are ISOs which are really only for employees. This might incentivize you to reach a certain quota or to be there a certain amount of time or for your team or your group or your division to reach a certain level or a production level. These are really what kind of tie people’s incentive to the company and to the overall company profitability to their own pay struct