Stock Option Calculator
- Last Updated: Sunday, 18 November 2018
If you’re offered stock options where you work, then you can use this calculator to figure out the potential value of that benefit. If you’re thinking about changing jobs and that job offers stock options, you can use this calculator to help you understand how those options might add to your total compensation package.
The variables used in our online calculator are defined in detail below, including how to interpret the results.
Current Stock Price ($ / share)
This is the current stock price of the option you’re being offered, stated in terms of dollars per share.
Annual Stock Options Grant (shares)
This is the actual grant of stocks, or an estimate of the annual stock options, you’ll be offered each year. These are the number of shares you’ll have an option on each year.
Strike Price ($ / share)
This is the strike price of the stock option. Normally, the strike price of an option is set higher than the current stock price. This provides management with an incentive to grow the value of the company, and its share price.
Stock Price Growth Rate (% / Year)
This is the expected growth in the stock’s value each year. Again, for a stock option to have value the price per share usually has to rise above current levels. This value is your expected percentage rise in the stock’s price each year.
Number of Years (Years)
This is the number of years over which you’ll be offered options. If you’re already participating in a stock option plan at work, then you can enter the number of years you’ve been participating.
Ending Share Price ($ / share)
This is the ending price per share for the stock. This value is calculated by taking the current stock price and escalating it by the stock price growth rate.
Average Strike Price ($ / share)
This is the average strike price per share. This calculator assumes that as the current stock price goes up, so will the strike price. The strike price is escalated at the stock price growth rate.
Total Stock Options Granted (shares)
These are the total number of stock options granted over the number of years indicated earlier.
Value of Stock Options ($)
This is the total value of the stock options granted. This value is calculated by taking the ending share price, subtracting it from the average strike price, and multiplying it by the total stock options granted.
Stock Option Calculator
Disclaimer: These online calculators are made available and meant to be used as a screening tool for the investor. The accuracy of these calculations is not guaranteed nor is its applicability to your individual circumstances. You should always obtain personal advice from qualified professionals.