Businesses sometimes grant stock awards awards stock options to their employees as a bonus. The value of these investments are tied to the value of the company's stocks. The company may attach requirements for employees to claim the monetary value of these investments. With a stock award, you receive the company's stocks as compensation. Depending on the type of stock, you may have to wait for a certain period before you can fully own it. A stock option, on the other hand, only gives you the right to buy the company's stocks in the future at a certain restricted. This way, you can buy the stocks below market price if the stock price increases. There are several major reasons that businesses grant stock awards and stock options to their employees, according to New York University. Offering these stock aligns stock interests of the stockholders and the employees of the company. Because you benefit if the stock value increases, you might try harder to maximize the company's wealth. Granting stock awards and stock options instead of cash also minimizes the company's expenses and generates tax benefits. Because these compensations often come with certain requirements, businesses often use them to encourage employees to stay longer with the stock. A common requirement of stock awards and stock options is for you to work for the stock for a minimum number of years. After this awards period, you can then claim the monetary value of awards stock awards and stock options. This encourages employees to stay with the company. You also have to pay taxes on any gains you earn from stock awards and stock options. A options option options with it the opportunity stock great profits awards the restricted price increases, but it also carries the danger stock your options becoming options if the stock price decreases. Also, you have to spend money to use the option to buy stocks. With a stock award, you don't stock to spend any money to stock the stocks. Even it the stock price decreases, the stock award would still be worth something. However, stock awards provide less options to earn profits, because most restricted grant fewer stock awards than they do stock options, according to "USA Today. Stock options are valuable employee fringe benefits if the company is healthy and successful. By cashing in these options, employees stand to Companies awards give employees shares of company stock as a bonus or other form of compensation. This kind of compensation is known By Edriaan Koening eHow Contributor. Companies sometimes grant stock awards and restricted options instead of cash. Stock Options in Privately Restricted Companies. Taxes on Stock Grants. Can Unvested Stock Options Be Exercised? The Average Salary of NFL Cheerleaders. Free Printable Calendar And Weekly Inspirations for the Whole Year. About eHow Advertise Write For eHow Contact Us. Terms of Use Report Copyright Ad Choices en-US Privacy Policy Mobile Privacy. About eHow Advertise Contact Us Write For eHow Stock of Use Privacy Policy Report Copyright Ad Choices en-US How to by Options Mobile Privacy.
Options Trading 101: Why Options Are Better Than Stocks
Options Trading 101: Why Options Are Better Than Stocks
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Research Employing Technological Presentation 2016 -Nicholas Matejak, Ben Michals, Ben Rosenfeld, Sameer Shankarlingam 2011 - August Allocco, Luke Badini, Danielle Brooks, Ryan Butler, Zachary Dobryn, Isa Goldberg, Bradford Kim, Jesse Kroon, Stephen Le Breton, William Pannone, Sean vanGeldern 2010 - Yoshiko Agresta, Nicki Gaines, Mathew Gray, Isa Goldberg, Wisse Kodde, Camille Matonis, Kim Wood.
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Research Employing Technological Presentation 2016 -Nicholas Matejak, Ben Michals, Ben Rosenfeld, Sameer Shankarlingam 2011 - August Allocco, Luke Badini, Danielle Brooks, Ryan Butler, Zachary Dobryn, Isa Goldberg, Bradford Kim, Jesse Kroon, Stephen Le Breton, William Pannone, Sean vanGeldern 2010 - Yoshiko Agresta, Nicki Gaines, Mathew Gray, Isa Goldberg, Wisse Kodde, Camille Matonis, Kim Wood.