top | item 26146992 (no title) doctorbaum | 5 years ago What's the difference, for the laymen discuss order hn newest iso1210|5 years ago Say Spotify's share price is $100, and as part of your compensation you are given an option to buy 100 shares at $100 in 5 years timeIf Spotify in 5 years time is $500, you buy 100 shares for $10k, and immediately sell them for $50k, making a $40k profit (or you keep them).If Spotify in 5 years time is $102, you buy 100 shares for $10k and sell for $10,200, making $200If Spotify shares in 5 years times is $90, you don't bother buying the shares, but your options are worthless.Now imagine you were given 100 shares instead, but couldn't sell them for 5 years (an RSU - or restricted stock unit)In 5 years time, if Spotify is $500/share, your shares are worth $50kIn 5 years time, if Spotify is $102/share, your shares are worth $10,200In 5 years time, if Spotify is $90/share, your shares are worth $9,000 maria_weber23|5 years ago Yeah this model sucks, unless they give you A LOT more of these options than they would give you RSUs. Then it could work out, if you believe in the company. tomerico|5 years ago You only earn money if the stock price appreciate closetnerd|5 years ago I'm envious of your laymen speak.Exactly right.RSU means they gave you the stock at price X. Options mean, they gave you the right to buy the stock at price X sometime in the future. dominotw|5 years ago so its like call options where employer eats the option fee? load replies (1)
iso1210|5 years ago Say Spotify's share price is $100, and as part of your compensation you are given an option to buy 100 shares at $100 in 5 years timeIf Spotify in 5 years time is $500, you buy 100 shares for $10k, and immediately sell them for $50k, making a $40k profit (or you keep them).If Spotify in 5 years time is $102, you buy 100 shares for $10k and sell for $10,200, making $200If Spotify shares in 5 years times is $90, you don't bother buying the shares, but your options are worthless.Now imagine you were given 100 shares instead, but couldn't sell them for 5 years (an RSU - or restricted stock unit)In 5 years time, if Spotify is $500/share, your shares are worth $50kIn 5 years time, if Spotify is $102/share, your shares are worth $10,200In 5 years time, if Spotify is $90/share, your shares are worth $9,000 maria_weber23|5 years ago Yeah this model sucks, unless they give you A LOT more of these options than they would give you RSUs. Then it could work out, if you believe in the company.
maria_weber23|5 years ago Yeah this model sucks, unless they give you A LOT more of these options than they would give you RSUs. Then it could work out, if you believe in the company.
tomerico|5 years ago You only earn money if the stock price appreciate closetnerd|5 years ago I'm envious of your laymen speak.Exactly right.RSU means they gave you the stock at price X. Options mean, they gave you the right to buy the stock at price X sometime in the future. dominotw|5 years ago so its like call options where employer eats the option fee? load replies (1)
closetnerd|5 years ago I'm envious of your laymen speak.Exactly right.RSU means they gave you the stock at price X. Options mean, they gave you the right to buy the stock at price X sometime in the future.
iso1210|5 years ago
If Spotify in 5 years time is $500, you buy 100 shares for $10k, and immediately sell them for $50k, making a $40k profit (or you keep them).
If Spotify in 5 years time is $102, you buy 100 shares for $10k and sell for $10,200, making $200
If Spotify shares in 5 years times is $90, you don't bother buying the shares, but your options are worthless.
Now imagine you were given 100 shares instead, but couldn't sell them for 5 years (an RSU - or restricted stock unit)
In 5 years time, if Spotify is $500/share, your shares are worth $50k
In 5 years time, if Spotify is $102/share, your shares are worth $10,200
In 5 years time, if Spotify is $90/share, your shares are worth $9,000
maria_weber23|5 years ago
tomerico|5 years ago
closetnerd|5 years ago
Exactly right.
RSU means they gave you the stock at price X. Options mean, they gave you the right to buy the stock at price X sometime in the future.
dominotw|5 years ago