<klink type="prcdr">How do I exercise a stock option grant?</klink>
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<tease>Why?</tease>
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<p>You can <glossary>exercise</glossary> a <glossary tNum="287113">vested</glossary> stock option grant by purchasing stock at the grant <glossary>strike price</glossary>. You can then either sell the shares and collect the cash proceeds less any income taxes withheld, or continue to hold the shares.</p>
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<li>Enter the stock option exercise in your investment account.</li>
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<li>On the <emph>Investing</emph> menu, click <emph>Portfolio</emph>.</li>
<li>Click the stock option account.</li>
<li>Click <emph>New</emph>.</li>
<li>Enter the stock option grant information:</li>
<ul>
<li><emph>Investment.</emph> Click the stock option grant. Use the grant, not the actual company stock (for example, <emph>XYZ 2001 Grant</emph>, not <emph>XYZ</emph>).</li>
<li><emph>Activity.</emph> Click <emph>Exercise & Sell</emph>. If you are exercising and holding, follow the instructions below to record your stock purchase.</li>
<li><emph>Quantity.</emph> Enter the number of shares you're exercising.</li>
<li><emph>Price.</emph> Enter the price when you exercise the shares.</li>
<li><emph>Total.</emph> This amount is optional. If you enter quantity and price, Money calculates the total.</li>
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<li>Click <emph>Enter</emph>.</li>
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<li>If you exercised and simultaneously sold, enter any cash deposited in your account and income tax withheld.</li>
<p>The proceeds of the exercised shares will be in the Cash Transactions register of your account. You need to enter transactions to deposit the proceeds in one of your accounts, such as cash, and track your income tax withheld.</p>
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<li>In the left pane, click <emph>Cash Transactions</emph>.</li>
<li>Click the <emph>Withdrawal</emph> tab, and then enter a transaction to transfer your income tax withheld to your federal and state tax categories.</li>
<li>Click the <emph>Transfer</emph> tab, and then enter a transaction to transfer your net proceeds to the account in which the proceeds were deposited.</li>
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<li>If you are holding all or some of the shares, enter a purchase of the shares on the date you exercised your options.</li>
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<li>In the left pane, click <emph>Investment Transactions</emph>.</li>
<li>Click <emph>New</emph>.</li>
<li>Enter the information, including:</li>
<ul>
<li><emph>Investment.</emph> Click the actual name of the stock, not the grant name. For example, click <emph>XYZ</emph>, not <emph>XYZ 2001 Grant</emph>.</li>
<li><emph>Price.</emph> Enter the market price per share that you paid for the stock. This price plus commissions will be your <glossary>cost basis</glossary>.</li>
<li><emph>Transfer from.</emph> Click the name of the account you used to pay for the stock, such as your checking account.</li>
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<li>Enter the remaining information, and then click <emph>Enter</emph>.</li>
