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Stock Options For Dummies [Kindle Edition]

Alan R. Simon
3.1 out of 5 stars  See all reviews (18 customer reviews)

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Book Description

If you’re like the majority of the estimated 12 million employees in the U.S. who have stock options as a key component to their compensation packages, you have a vague notion, at best, of how options work and what they can mean to your financial well being. What’s the vesting schedule for your shares and how will their strike price be set? What type of stock option grant will you receive, an ISO (incentive stock option) or an NQSO (non-qualified stock option)? What tax rules apply to your option program? Your financial future could depend on your knowing the answers to these and other questions regarding your company’s stock option plan.

Confused by all the brouhaha surrounding stock options? Let expert Alan Simon demystify this often-confusing investment vehicle for you. Featuring clear explanations of how your stock options might make you money—or not—this friendly guide fills you in on what you need to know to:

  • Understand different types of stock options
  • Read and find traps in your stock option agreement
  • Evaluate the pros and cons of company investment vehicles
  • Assess vesting schedules and tax laws
  • Tap Web resources

Simon demystifies the jargon, rules, and tax consequences of stock options. He provides a realistic picture of what to expect from your options, and he helps you see past the hype to understand what your employer is really offering. Important topics covered include:

  • What you need to know before accepting a compensation package that includes options
  • Developing a stock option philosophy and clear-cut goals
  • Knowing whether you’re being treated fairly by your company
  • Making sense of the language of stock options agreements
  • Getting a handle on key restrictions on how you exercise your options
  • Stock option valuation
  • Tax rules and how they apply to different types of options
  • How stock options can be affected by changes at your company

Stock Options For Dummies is the only guide you’ll need to get the most out of this important investment vehicle.


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Editorial Reviews

From the Back Cover

Find out if you should keep 'em or cash 'em

The fast and easy way(TM) to master IPOs, ISOs, ESPPs, and more! Confused by the huff and puff surrounding stock options? Let expert Alan Simon demystify this often-confusing world for you. From clear explanations of how your stock options might make you money - or not - this unintimidating guide will help you navigate your company's stock option plan with ease.

Discover how to:
  • Understand different types of stock options
  • Read and find traps in your stock option agreement
  • Evaluate the pros and cons of company investment vehicles Assess vesting schedules and tax laws
  • Tap Web resources

The Dummies Way

  • Explanations in plain English
  • "Get in, get out" information
  • Icons and other navigational aids
  • Tear-out cheat sheet
  • Top ten lists
  • A dash of humor and fun

Get smart! www.dummies.com Sign up for daily eTips at www.dummiesdaily.com Choose from among 33 different subject categories Get news you can use on everything from money to health to computers

About the Author

Alan R. Simon, author of Data Warehousing For Dummies, is a manager at Deloitte Consulting. Alan has experienced every side of stock options in public and pre-IPO companies, large Fortune 500 corporations, and small consulting firms.

Product Details

  • File Size: 2497 KB
  • Print Length: 336 pages
  • Publisher: For Dummies; 1 edition (March 11, 2010)
  • Sold by: Amazon Digital Services, Inc.
  • Language: English
  • ASIN: B004SPAP5I
  • Text-to-Speech: Enabled
  • X-Ray:
  • Lending: Enabled
  • Amazon Best Sellers Rank: #157,636 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
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Customer Reviews

Most Helpful Customer Reviews
65 of 72 people found the following review helpful
5.0 out of 5 stars Author response to "misleading title" complaints March 21, 2006
Format:Paperback
First, disregard the 5-star rating. *I* think the book is good of course, but that's not why I'm writing this comment.

To the two recent reviewers who complain that the book isn't about puts and calls but rather about ISOs, NQSOs, etc. - look, I'm sorry for your inconvenience but if you had taken about 2 minutes to skim the table of contents and the editorial review on the amazon.com page ("...your company's stock option plan..."), you would CLEARLY see what type of stock options this book discusses. In fact, taking less time to do so than it took you to write your complaint-reviews and give the book a poor review would have saved each of you $20 or whatever the book cost you.

So my sympathies to you for your misspent $, but come on: blaming the author and publisher for your own haste and, further, feeling the need to do so publicly on an amazon.com review with one- and two-star rankings? (At least the other reader who did the same thing back in August, 2003 had the courtesy to give a 5-star ranking because of the reselling experience on amazon.com to rectify his/her error.)

I sincerely hope that if you do begin to dabble in puts and calls - the other kind of stock options - that you do so with much greater care than you took in making your respective book purchases. Otherwise, you should really think twice about that side of the investing world.

To the one reader who is looking for a beginner's book about the other kind of stock options: see "Futures and Options For Dummies" by Joe Duarte. But do your homework first before buying!
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19 of 21 people found the following review helpful
5.0 out of 5 stars Every option-holder should read this book! August 9, 2001
By A Customer
Format:Paperback
By far, the best, most thorough, and most honest book on stock options I've ever read. Even though other books (such as Pastore and Thomas) cover taxes on stock options in more detail, the author definitely provides more than enough information, including considerations I've never seen elsewhere - ordinary income tax and AMT implications of working in multiple states, for example. And he covers the dreaded AMT trap of ISOs with detailed scenarios, better and easier to understand than I've seen anywhere else. But by far, this book's greatest value is in the author's no-holds-barred discussion of - as he puts it in one of the chapter headings - the good, the bad, and the ugly of stock options, including an entire chapter on stock option agreements and what to watch for. Like most Dummies books, there is humor and sarcasm, but the author doesn't overdo it; it just makes the book extremely readable. Even those who have had stock options in the past - whether or not they made money or not - will find value in the author's fresh perspective and post-crash look at just about everything about options.
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62 of 78 people found the following review helpful
5.0 out of 5 stars This is not what I was looking for. August 9, 2003
Format:Paperback|Verified Purchase
I was looking for a "dummies" book on options trading (puts, calls, volatility, etc.) so I ordered it. What I got was a comprehensive review of the ramifications of owning stock options issued by the company that employs you. In short, I felt like a dummy for not researching further before purchase. Don't make the same mistake I did. There is a silver lining, though. I promptly repackaged the book in the shipping box that I received it in and sold it through Amazon, recouping almost all of my original cost. If you have any books you don't need or want, I wholeheartedly endorse Amazon's used book marketplace. I gave it 5 stars because of this experience, and the fact that it is another top-notch example from the excellent Dummies series, just not what I was looking for. Incidentally, if you're looking for what I was looking for originally, you can't go wrong with anything Larry McMillan has written.
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6 of 8 people found the following review helpful
5.0 out of 5 stars Well rounded discussion on every facet of options October 19, 2002
By A Customer
Format:Paperback
A well rounded discussion on almost every facet of options, from how to understand the legal implications of the stock option plan to taxation. Simon explains preIPO, IPO, lockup periods, blackout periods, Rule 144 stock in detailed and desciptive ways. The chapters on taxation give an excellent overview - even of the 83b election and is probably sufficient for most. For more comprehensive discussion and tax strategy read Pastore's book.
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1 of 1 people found the following review helpful
4.0 out of 5 stars Good intro for some topics April 11, 2014
Format:Unknown Binding
This is a good intro for ISOs, NQSO's, taxation issues, and subjects related more to employee stock options. If you're looking for a book on how to hedge or speculate using options there are better books out there for that. My own view is that since options are a time wasting asset and aren't usually held very long you should get some background in technical analysis too since in the short run the stock market--especially these days--tends to be ruled by fickle market sentiments rather than fundamentals and by the now over 5000 hedge funds out there, most of which aren't headquartered in the U.S. so aren't subject to U.S. rules on mutual funds. Most mutual funds can't have more than 2% of their capital in any one position and many can't short stocks. Hedge funds have no such limitations. The argument for hedge funds is that since their (theoretically, anyway) strategy is to be market neutral at any one time, they are a good thing since they act to "stabilize" the market and move it toward equilibrium.

Of course this is just another academic theory that any experienced trader knows is pure nonsense. Don't get me wrong, I've studied a fair bit of academic economics and it's important to know some, but the reality is that the hedge funds all tend to have the same momentum mentality so they all pile into and out of the same stocks all at once, which defeats the original rationale for their existence. The other thing that didn't help was the removal during the Bush administration of the uptick short selling rule, another bad idea since anyone with any real world stock experience knows that stocks tend to crash downwards, not upwards.
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Most Recent Customer Reviews
5.0 out of 5 stars Very simple to understand
If I were rich, I could better use this book to get richer, as it is, I just buy penny stocks in an effort to maybe pick a potential winner.
Published 3 months ago by Scott M. Windle
1.0 out of 5 stars a DUMMY woulf buy a DUMMY book as this.
A DUMMIE book, with very basic material which is free all over Broker accounts, and on Internet. SO a DUMMY woulf buy a DUMMY book as this.
Published 3 months ago by Ron B.
1.0 out of 5 stars THE "DUMMIES" IN THE TITLE ARE THE PEOPLE WHO WASTED THEIR MONEY ON...
1 STAR

THE TITLE OF THE BOOK SHOULD TELL YOU IT CONCERNS ONLY COMPANY HELD FOR EMPLOYEE
OPTIONS. Read more
Published 7 months ago by Donald J Dolphin
2.0 out of 5 stars Misleading title
Book is probably OK if you want information on options received as part of a compensation package. Tax issues, etc. Read more
Published 10 months ago by Falcon
5.0 out of 5 stars makes stock options soooo E Z
I bought this because my company is going thru a merger and I needed ot learn about options and taxes quickly --answered all my questions !!
Published 16 months ago by Deb Simpson
4.0 out of 5 stars Good information
I am not finished reading this book, but so far I am happy with it's content. It's written with the Stock Options Novice in mind which is great! Read more
Published on March 22, 2012 by Camara
1.0 out of 5 stars Options for employees
This book is a review of employee options. I was hoping for a more comprehensive review that would explain options buying , trading etc. Read more
Published on July 28, 2008 by Richard D. Estensen
1.0 out of 5 stars Misleading Title
This book, to me, was completely worthless. I purchased it thinking, like others commenting, that it was about options trading (puts, calls, etc. Read more
Published on June 28, 2008 by Jason Briggs
1.0 out of 5 stars Misleading title
This book is aimed at employees elegible to receive stock options in the company they work for from their employer. Read more
Published on May 6, 2007 by Carl
1.0 out of 5 stars Title misleading
I was misled by the title of this book am disappointed. This book is NOT for individuals who want to take their investing to the next level and start trading options on the open... Read more
Published on March 20, 2006 by M. Edington
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More About the Author

I'm a long-time non-fiction writer who has authored nearly 30 technology, business, and career-oriented books dating back to the mid-1980s. However, my writing passion for more than a decade has been fiction: primarily historical fiction but also other genres. I dabbled with a fair number of ideas for novels as I wrote the proverbial million words of fiction while I also worked on my non-fiction books along with my "day job" as a consulting executive. All of those were eventually shelved (though one remains on my books-to-write list for someday down the road).

Back in the early 2000s, two new historical fiction ideas popped into my head right around the same time, and I began working in earnest on two manuscripts...THE FIRST CHRISTMAS OF THE WAR and UNFINISHED BUSINESS, both of which have been available since 2010. And as I wrote THE FIRST CHRISTMAS OF THE WAR, the idea for three similarly structured sequels in that family saga also surfaced...the first of which, THANKSGIVING, 1942, was published in November, 2012 on the 70th anniversary of when that story is set.

I also had the idea around the same time for my serialized novel GETTYSBURG, 1913: A NOVEL OF THE GREAT REUNION, which I've been writing off and on for nearly a decade in preparation for the 100th anniversary of that momentous occasion that has been all but forgotten over the years. Parts I and II of GETTYSBURG, 1913 are now available in eBook.

Hopefully, the serialized publication of this historical novel in three parts leading up to July 1, 2013 (which will also commemorate the 150th anniversary of the beginning of The Battle of Gettysburg) and then the 150th anniversary of the Gettysburg Address will bring The Great Reunion back into American consciousness...as well as provide a wonderful reading experience for all!

Also, since I grew up in Pittsburgh (where most of my historical novels to date have been set) I watched the great Roberto Clemente play for the Pittsburgh Pirates when I was younger. I just published a short memoir about Clemente, timed for the upcoming 40th anniversary of when the world lost Roberto on his humanitarian mission following the Nicaragua earthquake in 1972. Anyone who grew up in Pittsburgh in those days, or most any baseball fan, will enjoy CLEMENTE: MEMORIES OF A ONCE-YOUNG FAN - FOUR BIRTHDAYS, THREE WORLD SERIES, TWO HOLIDAY STEELERS GAMES, AND ONE BAR MITZVAH.

Next up during the remainder of 2013: the concluding Part III of GETTYSBURG, 1913: A NOVEL OF THE GREAT REUNION. Then we have THE FIRST CHRISTMAS AFTER THE WAR, the third novel in the "Coleman Family Saga" set during Christmas, 1945, in the works along with a fourth and final volume...and then that four-part saga will be concluded.

After that will come GETTYSBURG, 1938, a sequel to GETTYSBURG, 1913 that takes place at the 75th anniversary of The Battle of Gettysburg on the eve of World War II, with some of the same characters you'll come to know and care about in that first novel. A final novel in that trilogy is also in the works.

There's much, much more on the drawing board: time and fate will tell which other works are completed and published, but for now I have enough projects on my plate to keep readers engaged and enthralled for years to come!

Visit our alansimonbooks[dot]com website for book "extras" plus more information.

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