How do employee stock options differ from standardized options?
Employee stock options differ in many ways from what many refer to as standardized (or “ordinary”) options. First, employee stock options are not traded on exchanges. In contrast, standard options are traded on up to six exchanges in the United States. Second, employee stock options are not standardized, whereas exchange traded options have standardized terms, normally representing 100 shares of the underlying equity. Lastly, employee stock options generally are not transferable. Standardized options are fungible (interchangeable) and can be bought and sold during exchange trading hours on any exchange that lists them.
