The Difference between Stock Options and Restricted Shares

The forms of equity compensation are restricted shares and stock options, but each appears with some conditions.

  • Restricted shares are awarded absolute, and their owner has the same rights and privileges as any shareholder. For example, they may receive dividends and vote at the annual meeting. However, the company may reserve the right to buy back unvested shares if the employee leaves the company, and the shares may be vested.
  • Stock options are the right to buy several shares at a specific price in the future. The employed will get a windfall when and if the company’s stock price exceeds that price. The stock price is often vested like restricted shares.

Restricted Shares

Restricted shares are an outright award of equity ownership in a company. To motivate employees, most common established companies give them an equity stake.

However, they are usually vested. It is on situation that the employee will continue working at the company for a few years or until a company milestone is met when secured shares are given to an employee. This might be another financial target or an earnings goal.

Such shares are often acknowledged in stages, each with its vesting date or milestone attached.

A double-trigger provision may restrict the shares. Meaning, an employee’s shares become unrestricted if another acquires the company, and the employee is fired in the restricting that follows.

After a merger or other significant corporate event, insiders are often awarded restricted shares. The restrictions are expected to deter premature selling that might adversely affect the company.

An executive who leaves the company, runs afoul of SEC trading restrictions may have to forfeit their restricted stock, or fails to meet performance goals.

Stock Options

Employee stock options are an agreement of future profits that might or might not pan out yet. They are often granted by start-up firms that have not yet gone public and want to persuade employees to get the firm outside the ground.

Stock options do not affect a transfer of ownership. They are a right to buy shares at a specific price at some future date — the employee earns by the difference between the option price and the actual market price.

Stock options are usually restricted by a market standoff provision, which limits the sale of shares for a certain period after an initial public offering to stabilize the market price of the stock.

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I     Advantages of the Forex Market            3
II    Basic Forex Concepts                              8
III   Orders in the Forex Market                     13
IV   Game Plan for Successful Trading       18
V    Beginner Trading Strategies                   25

Chapter 1:


1.1. What Is The Forex Market?

The Forex market is a place in which investors are allowed to trade foreign currencies in a given trading period. It is considered to be the world’s largest market with a daily output of 3 trillion US dollars.

The value of currencies is constantly changing every minute throughout the day, depending on the supply and demand levels. Therefore, the market is open twenty-four hours a day five days a week.

Compared to other financial mediums, the Forex market provides better security in the world of investment.

The concept of Forex trading is similar to the regular market, where participants buy and sell goods. In the Forex market, traders are buying and selling foreign currencies. There are over 100 currency pairs available in the financial markets.

There is a uniform currency exchange rate used in the global financial markets. Whatever exchange rate is used in New York, it will be the same exchange rate used in other countries.

The Forex market involves an international network of computers and brokers from all over the world.

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