Vesting & grants
What is Strike Price?
The price per share an option holder must pay to exercise - set at the 409A fair market value at the time of grant.
Strike price (also called exercise price) is what you pay per share to convert a stock option into actual stock. It's pegged to the company's 409A fair market value at the time of grant - set by an independent valuation. The 'spread' = current FMV - strike price. A strike of $0.50 for a share now worth $10 has a $9.50 spread per share. The lower your strike relative to FMV, the more valuable your option. ISO holders can use 83(b) to lock in tax basis at exercise time.