What is a Non-Qualified Stock Option?
A non-qualified stock option allows a buyer to purchase stock at a certain price, but he will have to pay income taxes on the gains generated by selling it. This differs from an incentive stock option, which “qualifies” for a tax benefit, but must be held for a specific amount of time before it can be sold. Non-qualified stock options are very common in the financial world, and can provide individuals with a way to bring in substantial returns in the stock market under the right conditions. This type stock option is a benefit often offered to employees to enable them to purchase a certain amount of company stock at a predetermined price.
Related Questions
- Does the change in the AEP Retirement Savings Plan service provider apply to the non-qualified plans, including the supplemental savings plan and the deferred income plan?
- What is the difference between incentive stock option (ISO) grants and non-qualified stock option (nonqual) grants?
- What is a non-qualified stock option (nonqual)?
