cashless exercise


A method of converting options into stock that requires no initial cash payment to cover the strike price. Essentially, a broker briefly loans enough money to exercise the options, and a portion of the stock is sold immediately after exercise in order to repay the broker. In this respect it is essentially buying on margin. The broker is willing to enter this arrangement when that broker feels that the option holder will honor his/her commitment and quickly sell his/her stocks to settle the debt to the broker.

Use cashless exercise in a sentence

You may want to try and take on a cashless exercise if you think that it will help you make money in the future.

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The cashless exercise method was working very well for us and I thought everything would be going good very soon.

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