zlacker

The stock was purchased at an 80% discount.

To be clear, it was a stock option, and the option price was 20% of the stock price. So it had to go up 20% to break even. But if it went up 40% you doubled your money.

This is basically what happens behind the scenes at other companies that offer you stock compensation in the form of options. It's just all hidden from you.

>>jedber+(OP)
Especially after the backdating scandal many companies moved to offering RSUs. These were shares just purchased at a favorable price, no option involved.

>>jedber+(OP)
the option price was 20% of the stock price.

20% off the stock price?

>>TomVDB+ow
No of.

If the stock was at $100 that month, we paid $20.

>>jedber+8J
> If the stock was at $100 that month, we paid $20.

and

> So it had to go up 20% to break even. But if it went up 40% you doubled your money.

Are contradictory. If you paid 20% of the stock prices you made money instantly, you made a TON of money actually.

>>ars+fT
The stock is at $100. I purchase the option to buy it in the future at $100. I pay $20 for this option. I'm currently $20 in the hole, because I paid $20 for the option and got nothing.

In the future, when the stock is at $120, I exercise the option and buy the stock for $100 with money borrowed from ETrade, and then sell it for $120. I've spent a total of $20, and gained $20 from the sale after paying back the loan, and am thus even.

In the farther future, when the stock is at $140, I exercise my option and pay $100 for the share with borrowed money. I've paid a total of $20 and I get $40 after paying back the loan. I'm $20 ahead.

Since I paid $20 out of my salary for the option, when it went up 20% I broke even, when it went up 40% I doubled my money.

>>jedber+vU
I get it not, thanks for adding the details (it was really not clear from your earlier posts).

This https://benefits.netflix.com/united-states/financial says the options currently cost 40% of the stock price, which seems very high to me.

>>ars+d21
Yeah they doubled it after I left. But in return they give everyone an automatic 5% on top of their salary.