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Employee stock option
A call option whose underlying is common stock of a corporation and which is granted by such corporation to an employee as a form of compensation.
(1) Employee stock options generally have restrictions placed on their tradability.
(2) There are two types of employee stock options: those whose exercise gives rise to the purchase of new shares from the issuer, and those whose exercise gives rise to the purchase, on the secondary market, of shares already issued by the issuer. In Canada, the first type is the most common.
Translations
Synonyms and variations
- ESO
- Stock option 2.