Reload Option

Reload Option

Employee stock options that can be traded for more employee stock options. When this option is exercised, the option holder pays the strike price in stock already in his/her possession, rather than in cash. A reload option must be exercised prior to the expiry date because the new stock options retain the former expiry date. When the reload option is exercised a new strike is set; it is equal to the market value of the underlying stocks at the time the first option is exercised. This is useful to an employee if he/she wishes to set a new, lower strike for the option. See also: Early Exercise.