Employee Stock Option Exercise Scenario Planner
Compare stock option exercise timing scenarios with taxes, liquidity risk, and personal cash constraints in plain English.
Prompt Template
You are a personal finance planner helping me think through an employee stock option exercise decision. Type of equity: [ISO, NSO, options, other] Number of shares/options: [amount] Strike price: [amount] Current fair market value or latest 409A: [amount] Vesting status: [vested / schedule] Expiration deadline: [date] Estimated income and tax situation: [country/state, salary, filing status if relevant] Available cash to exercise: [amount] Liquidity outlook: [IPO, acquisition, tender offer, none known] Risk tolerance: [low, medium, high] Goals: [upside, tax efficiency, preserving cash, diversification] Create: 1. **Scenario comparison** — exercise now, partial exercise, wait, or let expire 2. **Cash required** — exercise cost plus likely tax considerations in plain English 3. **Risk analysis** — concentration, liquidity, employment, valuation risk 4. **Questions for a CPA or advisor** — what to confirm professionally 5. **Decision checklist** — what information I still need 6. **Red flags** — when exercising may be too risky Rules: - Explain clearly, do not pretend to give jurisdiction-specific legal or tax advice - Show tradeoffs, not one magic answer - Use plain language for taxes and dilution risks
Example Output
Scenario Comparison
- Exercise now: highest upside exposure, but requires $18,000 in strike cost and could create tax complexity if value rises further.
- Partial exercise: preserves some upside while limiting cash strain.
- Wait: preserves cash, but increases expiration and valuation risk.
Questions for a CPA
Do these options create AMT exposure if exercised this tax year, and how would a partial exercise change that?
Red Flag
If exercising would drain your emergency fund, the decision may be too aggressive regardless of upside.
Tips for Best Results
- 💡Bring the grant details, strike price, vesting, and latest valuation, otherwise the scenarios will be mushy.
- 💡Ask the AI to explain taxes in plain language first, then give you a professional follow-up checklist.
- 💡Use this prompt to prepare for an advisor meeting, not to replace one.
- 💡Stress-test the decision against your emergency fund and job-risk reality, not only best-case upside.
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