Get the latest tech news
How Stock Options Work
Employee stock-option programs are typically authorized by a company's board of directors (and have historically been approved by the shareholders) and give the company discretion to award options to employees equal to a certain percentage of the company's shares outstanding. Options give employees the right to buy a certain number of their company's shares at a fixed price for a certain period of time, usually 10 years.
Options give employees the right to buy a certain number of their company's shares at a fixed price for a certain period of time, usually 10 years. Once an option is vested, the employee can then "exercise" it--that is, purchase from the company the allotted number of shares at the strike price--and then either hold the stock or sell it on the open market. When an employee exercises an option, the company must issue a new share of stock that can be publicly traded.
Or read this on Hacker News