PrivateTechShares

Home › Glossary › Exercise (options)

🌍 US & Europe · Vesting & exercise

Exercise (options)

Also called: exercising options

In one line

Paying the strike price to turn your vested options into actual shares you own.

In plain English

Exercising is the moment you convert coupons into real stock by paying for them. Until you do, you own only the right to buy — not shares you can sell.

If you were explaining it to a 5-year-old

It's handing over the coin on your voucher to actually take the toy home. Now it's really yours.

Why it matters when you sell

You generally must exercise before you can sell in a secondary. The cash cost and the tax it triggers are often the biggest barriers to getting liquidity.

Related terms

Stock optionStrike pricePost-termination exercise windowAlternative minimum tax (AMT)Cashless exercise

Put it to use

Cost to exercise + AMT · Financing to exercise

Hold private-company shares? Our free estimator shows what your stake could be worth and whether you can sell — no sign-up. Value my equity (free) → · Back to the glossary →
When you're ready to go deeper, there's an optional Equity Toolkit and Report.

Sources

A general market-practice term. See how we define and source the glossary in our methodology. General information, not advice.

Educational information only — not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.