Updated: October 2026
An option gives you the right, but not the obligation, to buy or sell something at a fixed price within a set period. Investors trade options on stocks, indices and currencies. Companies grant options to their employees. The mechanics are the same, but the purpose is very different. For a trader, the benefits are flexibility, protection against price drops and leverage. For a company, the same right without obligation lets employees share in its growth without paying anything up front.
Share Council does not give investment advice and does not trade options. We help companies in the Netherlands set up employee options, SARs and STAK structures.
What an option is
A call option is the right to buy at a fixed price, called the strike or exercise price. A put option is the right to sell at a fixed price. Every option has an end date, after which the right expires.
A simple example: you pay €10 for a call option on a share with a strike price of €50. Four months later the share is worth €70. You exercise, buy at €50 and hold something worth €70. That is €20 of value, or €10 after the €10 you paid for the option. If the share never rises above €50, you let the option expire and lose the €10. Our knowledge base has the same example in What are options?
The benefits of trading options
Flexibility
Because you hold a right and not an obligation, you choose whether to act. You can position for a rise (calls) or a fall (puts) and decide later whether exercising makes sense.
Risk management
An investor who owns shares can buy put options to limit the damage from a price drop. If the share falls, the put gains value and offsets part of the loss.
Leverage
A small premium controls a much larger amount of the underlying asset. That raises the possible return, and it raises the possible loss in the same way. If the option expires worthless, the premium is gone.
Potential returns in rising and falling markets
With calls and puts, traders can try to profit from rising, falling or volatile markets. Options are complex products. If you trade them, read the risk information from your broker and the AFM, the Dutch financial markets regulator.
Why companies use the same idea for employees
The features that make options attractive to traders also make them work as pay in a growing company.
The employee gets the right to buy shares (or, in many Dutch companies, depositary receipts issued by a STAK) at a fixed price. They do not have to pay anything until they exercise, and they only exercise if the company is worth more than the strike price. If the company grows, they share in that growth. If it does not, they lose nothing they paid for.
The strike price is usually set at a fair valuation on the day of the grant. An early employee who joins when the company is worth €2 million gets a lower strike price than someone who joins when it is worth €10 million. That is the fairness argument for granting early: the people who took the early risk get the upside from that point on.
Employee options compared with traded options
| Traded options | Employee options |
|---|
| Who issues them | An exchange or a financial institution | The company the employee works for |
| Can you sell them? | Yes, on the market | Usually not; they are personal |
| What you pay up front | A premium | Usually nothing |
| When you can use them | Any time before expiry (American) or at expiry (European) | After vesting, under the plan rules |
| Purpose | Speculation or hedging | Hiring, retention and a fair share in growth |
How employee options are taxed in the Netherlands
For an employee, the gain on an option is treated as wages and taxed through payroll, not as an investment result. Since 2023 the taxable moment is in principle when the shares become tradable, and the employee can choose in writing to be taxed at exercise instead. The taxable amount is the value of the shares at that moment minus the strike price. This is set out by the Belastingdienst in its Nieuwsbrief Loonheffingen 2023, issue 2 (section 17).
So granting options early does not save tax: the tax is on the value gained by the taxable moment. The reason to grant early is fairness and retention. Read more in What are the fiscal implications of options? and option lock-up periods and Dutch taxation.
Options or SARs?
A stock appreciation right (SAR) pays the employee the increase in value without them buying shares. It is simpler to run and does not add shareholders, but it is a cash commitment for the company. With options, the employee becomes an owner after exercising. We compare both in options on shares vs SARs, and What is a SAR? explains the mechanics.
Setting up employee options with Share Council
On the options and SARs page you can see how Share Council handles grants, vesting schedules and strike prices. The Free plan covers cap table management for up to 25 shareholders at €0 (prices as of October 2026). When you are ready to grant options, the Co-Ownership Starter plan sets up options over a future STAK. You can start for free and see whether it fits your company.
