zlacker

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+(OP)
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+I7
Yeah they doubled it after I left. But in return they give everyone an automatic 5% on top of their salary.