Stock Options 101Stock options are often granted in lieu of a salary. No one usually chooses to work for free. Would you?
They are not always exercised prior to expiry, especially if the company's shares don't perform well.
And for a small company that can't afford to pay an adequate salary to someone who may be performing an excellent service, the option is the only alternative form of payment as an incentive to do excellent work.
So if the share price rises a substantial amount, it would make good sense for the holder to exercise his/her option to purchase. And if the company has performed well, the holders of these kind of options should feel entitled to such an alternative reward for their services!
Their services have helped the company's share price rise by some substantial amount! All shareholders stand to benefit when that happens!
Do your homework when you choose to be an investor!
Try to better understand the game.
All the best! Java