Incentive Stock Option - ISO
Although ISOs have more favorable tax treatment than non-qualified stock options (NSOs), they also require the holder to take on more risk by having to hold onto the stock for a longer period of time in order to receive the better tax treatment.
Also, numerous requirements must be met in order to qualify as an ISO.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
incentive stock option — Fin in the United States, an employee stock option plan that gives each qualifying employee the right to purchase a specific number of the corporation’s shares at a set price during a specific time period. Tax is only payable when the shares are… … The ultimate business dictionary
incentive stock option — noun an option granted to corporate executives if the company achieves certain financial goals • Syn: ↑incentive option • Hypernyms: ↑option … Useful english dictionary
incentive stock option — An option granted to an employee of a corporation to purchase stock of such corporation at a specified price for a specified period of time. Generally, there are no tax consequences until such time as the stock is sold … Black's law dictionary
stock option — see option 3 Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. stock option n. Th … Law dictionary
Stock option expensing — is a method of accounting for the value of share options, distributed as incentives to employees, within the profit and loss reporting of a listed business. It is an accounting standard thought by several Socially Responsible Investors to improve … Wikipedia
stock option — an option giving the holder, usually an officer or employee, the right to buy stock of the issuing corporation at a specific price within a stated period. [1940 45] * * * Contractual agreement entitling the holder to buy or sell a share of stock… … Universalium
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Statutory Stock Option — Also known as incentive stock options, this type of employee stock option gives participants an additional tax advantage that unqualified or non statutory stock options do not. Statutory stock options require a plan document that clearly outlines … Investment dictionary
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Non-Qualified Stock Option - NSO — A type of employee stock option where you pay ordinary income tax on the difference between the grant price and the price at which you exercise the option. NSOs are simpler and more common than incentive stock options (ISOs). They re called non… … Investment dictionary
option — op·tion 1 / äp shən/ n 1: the power or right to choose; also: a choice made or available 2: a privilege of demanding fulfillment of a contract on any day within a specified time 3: a contract conveying in exchange for the payment of a premium a… … Law dictionary