I recently experienced something that many in high tech get to do. I cashed in some stock options. I often didn't think I'd ever get to. The first options I was granted were in 2001 with my previous employer. And it's only now that I saw anything from them.
The company stock price unfortunately tumbled after they acquired my previous employer. When we joined we were granted options. We've also gotten additional options at annual review. In the subsequent grants, the stike price was lower based on the lower stock price.
With the new CEO, the company has done better, and the market price has improved. Some of the options in the subsequent grants are now modestly in the black. So I decided to cash some. I would have preferred to wait because they aren't far in the black at this point and the company has a strong upside potential. However I have some short term financial issues which unfortunately created a need for a shorter term view of things.
I didn't know what the process was to cash out. I thought it would be just click some buttons and the money would be there. There was a bit more to it than that; it's an interesting process which requires a bit of patience.
Our company employee stock plan is handled by e*trade. Once the trading window was open I logged in. etrade has an excellent user interface and bringing up the screen and selecting the 750 option shares to cash on a same day sale was very easy and intuitive. So on the first eligible day, a Tuesday, I did the clicks and the order was executed immediately as expected. Great.
But then I was a bit surprised. The execution was immediate but then I learned that the trade was not "settled". The help said settling takes around 3 business days, but sometimes longer for employee stock plans. Well Friday came and went and it was still unsettled. It wasn't until the next Friday that it settled, 10 days after the execution.
I got the etrade e-mail saying it was settled and was excited. But then there's another step. After settling it takes a bit longer for the proceeds to get into my etrade account. So Friday became Monday and then the money was there.
Now to spend the money I had to get it from my etrade account into my regular chequing account. I had a link set up between my etrade account and my chequing account. It was very simple to do the cash transfer between the etrade US money stock account and my Canadian bank account. But this time I wasn't surprised when it said it would be the next day for the money to appear in my bank account.
Finally the next morning the proceeds from the stock options was indeed in my bank account. It was two weeks after the order execution. So now I know what to expect. I hope to be able to cash out some more options. If the stock price can go up by around $2, then that would be very nice. At that level our original grant after the takeover, which is the largest grant, would be worth cashing. Also due to some SOX accounting thing or whatever, our original grants are actually fully vested, so the potential gain would be pretty nice.
All together I cleared an amount about equal to the take home pay from one paycheque. We get paid twice a month. So not bad, can't complain. It was a nice reward for the hard work over the years. I still have lots of options uncashed so if we can have a nice stock price run then that could be good for me.
For etrade I give them a very positive review. Their site is excellent. It's secure and easy to use. The user interface is laid out logically and navigation is straightforward. There's plenty of context help. With the alerts I always knew what was going on through the process. In the future I hope to be able do some investments again. I would be inclined to use etrade for that based on my experiences with them here.
