Cashless Exercise

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Definition: Cashless Exercise

Cashless Exercise
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Full Definition of 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.

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https://payrollheaven.com/define/cashless-exercise/
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Cashless Exercise. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
April 16, 2024 https://payrollheaven.com/define/cashless-exercise/.
Chicago Manual of Style (CMS):
Cashless Exercise. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
https://payrollheaven.com/define/cashless-exercise/ (accessed: April 16, 2024).
American Psychological Association (APA):
Cashless Exercise. PayrollHeaven.com. Retrieved April 16, 2024
, from PayrollHeaven.com website: https://payrollheaven.com/define/cashless-exercise/

Definition Sources

Definitions for Cashless Exercise are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 20th November, 2021 | 0 Views.