Choose the exercise method that works best for you.
M&T Securities Brokerage Services can help employees of most publicly traded companies exercise stock options. Whether you wish to exercise Incentive Stock Options or Non-Qualified Stock Options, we offer several methods.
Cashless Stock Option Exercise
If you would like to exercise your options without using any out-of-pocket funds, consider one of the following:
Exercise & Sell the Stock
The option exercise and subsequent sale of stock are virtually simultaneous transactions. The net proceeds available are calculated by subtracting the exercise cost, the commission cost and any applicable taxes from the proceeds of the sale of stock.
Exercise & Sell to Cover
This cashless method allows you to sell only enough shares of the stock from the option exercise to cover the total exercise costs, commission and applicable taxes. The remaining shares are retained in your brokerage account.
Exercise & Hold the Stock
This method requires you to be approved for margin trading. As long as the exercise meets our clearing firm's margin requirements, the margin loan covers the total cost of the exercise and applicable taxes. The debit balance created by the margin loan is subject to monthly margin interest. The shares are retained in your brokerage account.
Cash Exercise & Hold
You pay the total cost of the exercise plus applicable taxes. Shares are then retained in your brokerage account.
Use pre-owned shares of the stock you are exercising to pay for all or part of the purchase price plus any applicable taxes. Please note that this method is subject to specified guidelines established by the issuer.
Tax Considerations with Employee Stock Options
Employee stock options can be complicated, and the tax implications of exercising them can be significant. M&T Securities Brokerage Services does not provide tax advice on employee stock options. Please speak with your tax advisor prior to entering an order for the exercise of incentive options.