US income inequality

[PeoplesElbow]

If someone gifts you stocks, you are still considered an investor and shareholder.

But as I said above an option is the "rain check" of the stock market. Doesn't mean you are invested....yet.

 

[vraiblonde]

An option isn't a stock, but a contract that gives you the right to either buy or sell a stock at a certain price.

Options are traded just like stock, the real difference is that options have expiration dates, past that date they are totally worthless.

I think most people don't understand what an option actually is.

So indeed the Microsoft Millionaires purchased their stock and it wasn't gifted? That's a real question because I'm not sure how it went, but I do remember that there was some problem with MS not declaring the stock options as an expense.

 

[PeoplesElbow]

So indeed the Microsoft Millionaires purchased their stock and it wasn't gifted? That's a real question because I'm not sure how it went, but I do remember that there was some problem with MS not declaring the stock options as an expense.

Basically, but I am sure the options were deep discounts. They were probably given ones with very low strike prices on them like $5/share. You can also simply sell the options.

I trade options, but I have never exercised them (used to buy or sell). You can make money very fast, or lose your investment entirely but at least it is a fixed loss unlike shorting a stock.

The particulars on how each company does it can vary.

 

[DoWhat]

If you people really knew.

 

[vraiblonde]

Basically, but I am sure the options were deep discounts. They were probably given ones with very low strike prices on them like $5/share. You can also simply sell the options.

Okay good - that was my understanding but I admit I have only a nodding acquaintance with the stock market.

Anyway, my whole point was to correct TJ when she said that people don't get rich in the stock market.

 

[PeoplesElbow]

Okay good - that was my understanding but I admit I have only a nodding acquaintance with the stock market.

Anyway, my whole point was to correct TJ when she said that people don't get rich in the stock market.

He would never believe it even if he did it himself.

 

[LibertyBeacon]

Okay good - that was my understanding but I admit I have only a nodding acquaintance with the stock market.

.

Thanks, Captain Obviious!

 

[Hijinx]

Thanks, Captain Obviious!

You need to stop coming in drunk at 3 AM in the morning.

Obvious is spelled with one "I".

 

[GURPS]

If someone gifts you stocks, you are still considered an investor and shareholder.

not until you cash them ..... or 'pay' for them .. otherwise they just sit there .... as someone who has gotten 1500 shares in the last 3 yrs ....

taxes for the sale show on your W2 at the end of the yr, because the profits from such a sale are considered 'income' and get taxed at wage rate

 

[GURPS]

So indeed the Microsoft Millionaires purchased their stock and it wasn't gifted?

..... so if get 300 shares grant price is 30 dollars the value is then $ 9000

over the next yr the price climbs ... eventually hits over $ 70 a share ... the company awards a stock split now I have 600 shares and the price halves again back to 35 dollars, but IIRC the original 'option price is now $ 15.00 [half or the original grant price]


the price climbs again ... to $ 45

so I take my 600 shares and 'excise' the options @ 45 dollars a unit for a total of $ 27,000 - the original $ 9000 = $ 18,000 on which I pay standard 30% ish Federal and State taxes [remember this is income not Cap Ex] for a total of $ 12,600


well my Stock Options were NSO