Ask HN: Is it possible to exercise options without providing the cash yourself?
3 comments
The below is not financial advice or recommendations, do your own research.
Because I wouldn't want to link directly to a provider, it's best you google "borrow to exercise options"
There are a lot of articles there discussing the pros and cons, including pointing to providers that provide loans with limited recourse should the stock become worth less than what you exercised with in a liquidity event. (Be sure to read all the Ts+Cs).
Of course, anyone fronting the risk here will take a big part of the upside should your options eventually become good, they have to both cover their costs on your transaction, make a profit, and cover the costs on all the loans they'll provide for stock that will become worthless.
Because I wouldn't want to link directly to a provider, it's best you google "borrow to exercise options"
There are a lot of articles there discussing the pros and cons, including pointing to providers that provide loans with limited recourse should the stock become worth less than what you exercised with in a liquidity event. (Be sure to read all the Ts+Cs).
Of course, anyone fronting the risk here will take a big part of the upside should your options eventually become good, they have to both cover their costs on your transaction, make a profit, and cover the costs on all the loans they'll provide for stock that will become worthless.
I am not an expert at all in stock options.
But how can the company estimate the current value at $10 when their FMV is $2?
But how can the company estimate the current value at $10 when their FMV is $2?
I think the OP means the strike price of $2 was the FMV when the options were issued. The current value is the company's estimate of FMV right now.
Estimate is used since the company hasn't IPOd yet. So, valuation is private.
Estimate is used since the company hasn't IPOd yet. So, valuation is private.
I don’t really want to take the risk on buying these myself nor do I really have the cash to invest if I wanted to. Didn’t know if there was any other option to let someone else front the cash take the risk even if it meant giving up a large chuck of the possible reward.