Have you ever made money with stock options?

[FIREd]

We have been granted thousands of options to purchase company shares in the past, but so far never managed to make even $1 in profit with stock options.

What about you? Were you one of the lucky few?

 

[ziggy29]

Yes, I received about 10,000 stock options (total) from Megacorp from 2000 to 2003, and I've probably made about $50,000 from them over the years. I only have options for about 200 shares remaining, with an option price of $18 with a current market price of about $28.

 

[FIREd]

You're too fast Ziggy, I didn't even have time to post the poll...

 

[REWahoo]

I won the stock options lottery - unfortunately not the Powerball Grand Prize.

Over a period of six years I was awarded a total of 115,000 options. Every last one was underwater until a month before I retired when the company was purchased. A condition of the sale was to make good on the options which netted me about one year's salary. A nice parting gift.

 

[Alan]

Back in the 80's in the UK my megacorp used to give us our annual bonus in shares. When we moved to the USA I couldn't be bothered to hang onto them so sold them in September '87. At the time they were 16 pounds/share and a couple of weeks later they collapsed and never ever recovered. (the megacorp itself finally disappeared in 2007).

Only individual shares I ever owned but I did make a few thousand on them.

 

[Koolau]

Left megacorp with several hundred share options on the table. Still have a few years to exercise, but none of the options has EVER been above water.

However, prior to that (while still w*rking) I exercised a couple of above-water options and made a small killing (maybe 20K to 30K total). Bad news was that these "options" were really a "bonus" and were not only fully taxable but also treated as "earned income" as in SS taxable. Turns out that half the shares I picked up are within a few bucks of being "underwater" based on the original strike price. Based on the price when I actually used the option, they are all WAY underwater. If I had any sense, I'd learn how to use this situation to tax-loss harvest. Maybe I'll actually do that, but I tend to the "paralysis by analysis" gene.

All in all, guess my experience with options has been better than a stick in the eye, but, in hind sight, I could have played the game a LOT better than I did.

Now, if I just sit tight, I suppose someday the stock could come roaring back and I'll net another small fortune. Of course, you know about pigs flying and monkeys might (well, you know).

So how do you harvest a tax loss again (and I don't mean picking the stock back up after 30 days)?

 

[clifp]

My sub $1 options from Intel were enough for me to retire on, with my IRA, and 401K being my emergency fund. How was I to know that 10 years later investing in 100 year old companies with decades of steadily increase dividends would turn out to be as risky as technology companies. I have not yet calculate if keeping my Intel stock would have been better than selling them (mostly in the $50 range)and purchasing GE, BofA, Wells Fargo, and Berkshire Hathaway.

 

[Bimmerbill]

How about "No, I let my options expire since they we far underwater"

 

[Orchidflower]

Yes, and lost money. Now the megacorp is totally out of business, and it was THE leader in it's field for quite a few years. I lost money on that deal, but just a couple thousand.

 

[Jake46]

I did pretty well with stock options before the dot com bust. I still had a lot of vested options when I retired in 2007 but they were all underwater. The company switched to restricted stock grants in 2005 and my grants helped in reaching FIRE.

 

[walkinwood]

I made money, but it took 12 years of accumulating grants and waiting for the stock price to rise sufficiently. I sold my first option grant exactly 10 years after receiving it. Sold the rest as I prepared to leave the company. I was lucky that the stock price rose during the last 2 years there.

 

[W2R]

Not me, being a federal employee.... but then I knew that when I accepted my job offer.

 

[bbbamI]

Managed to sell options a few years ago and received approximately $10k. There are about 6,000 options left....underwater of course.

 

[M Paquette]

Company stock options are a bit of a crap shoot, as in a roll of the dice. Sometimes they work out well, other times, not so much. Being extremely patient and holding, rather than selling as options vest, tends to work out better if the company is doing OK, but there's a large piece of luck involved as well.

There are a couple of people on this board whose retirement is largely funded by a pile of vested options in their former employer, but that is the exception, and not the usual result.

 

[kumquat]

If not for options granted by former mega-corp, I'd still be slaving away.

 

[theloneranger]

I have been working for a company in an industry that has not suffered nearly as much as autos, banks, etc. Consumers spend money on food when cutting back on all else. Stock options have made me several hundred thousand several years ago and it looks like there will be several hundred thousand more at retirement in a couple of years, especially if there is a reversion to the mean in the market.

 

[HornedToad10]

Not yet, but my options are only ~5% underwater. Although I am glad that we have moved more to a restricted stock approach, since then you at least always make money from vesting(assuming company doesn't go out of business).

 

[tryan]

My megacorp gave options to select managers at 1/2 current market value. Never moved much so they only netted me about 8k.

 

[Dog]

Made some money off of shares that were granted over the past 10 years. I still have about 300 shares that will expire later this year - the stock will never hit the price needed to make any money though.

 

[eridanus]

I had some in a dotcom. I sold the first day of going public and netted a few thousand on the pop.

The other dotcom options expired worthless or nearly so. Bought for a few thousand and sold for $135. This happened a few times.

 

[JohnDoe]

I made (and lost) money buying and selling options -I never exercised them.

 

[clifp]

Company stock options are a bit of a crap shoot, as in a roll of the dice.

That's right up there with saying the stock market has been volatile recently in the understatement department.

I was 2 for 3 in stock options which I think was very good. I also played poker with a group of friends from my second company (VisiCorp) for many years after it went belly up. As Silicon Valley engineers/managers I believe all of us got stock options at all of our companies over the almost 20 year period and perhaps 1 out 4 every made money.

Two guys in particular illustrate the crap shoot nature of options. "Bill" was a very good engineer, and "Mark" was the best software engineer I ever worked with. Between the late 80s and 2000, both guys went to 4 or 5 start ups. Bill made money at all of the companies, before ending up at Intuit (Quicken) a few months before the company when public. Bill didn't make multi millions, but I believe he made made enough in options as an engineering manager to buy a very nice house in Silicon Valley and one in Tahoe. Meanwhile Mark, would typically go to the hot start up often as director or Vice President of engineering, and the firms would go out of business. Finally in 99, at the the heighth of the dot com boom, Mark was the VP of engineering at E commerce firm that was going public. He gave all of us poker buddies, friends and family stock. This meant we could buy 300 shares at the IPO price. As was typical of the time, the stock immediately jumped from $12 to $50. We all sold making a nice profit (ten times more than any of us made or lost playing poker over the year). But Mark being a officer couldn't sell for a year, by the time the year was up the stock had dropped down to $2. Once again depriving Mark of making any money on stock options.

 

[Free To Canoe]

I never made money on option. Never impotent enough to get em.
Made some money on company stock though. Cashed in at dot com time.

The thing I find interesting in reading the posts is how many of the good companies that many worked for went belly up.

Free

 

[harley]

Mine were underwater since I got them except for a couple of weeks a few years ago. I could have made maybe $1K, but didn't exercise in time. They're still there until 2010, but I doubt they'll ever see daylight again. So I'm with Bimmerbill. You need an underwater option on the poll before I can vote.

 

[Telly]

Nope, never made a cent. Many thousands of options spread over years in groups, the last few thousand just expired. Worthless.