Stock Option Strike Discount Calculator: FMV Premium Over Strike Price
Work out the gain (or loss) on a stock option compared to its strike price — the intrinsic value that drives whether exercising makes sense and how much paper wealth the option represents.
Adjust the inputs and select Calculate for a full breakdown.
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Gain over strike | Dollar gain per share |
|---|---|---|
| $30 strike · $50 FMV | 66.67% | 20 |
| $5 strike · $25 FMV (early-stage) | 400.00% | 20 |
| $80 strike · $60 FMV (underwater) | -25.00% | -20 |
| $10 strike · $150 FMV (IPO winner) | 1400.00% | 140 |
How This Calculator Works
Enter the strike price (per share, from your option grant) and the current fair market value per share (current market price for public stock, or most recent 409A valuation for pre-IPO). The calculator gives the percent gain over strike and the dollar value per share.
The Formula
Percentage Change
Old is the starting value, New is the ending value
Worked Example
A $30 strike option with a current FMV of $50 represents a 66.7% gain over strike — $20 of intrinsic value per share. On 10,000 vested shares, that's $200,000 of paper gain. Whether to exercise depends on tax treatment (AMT for ISOs, ordinary income for NSOs), liquidity, and your view on the underlying stock.
Key Insight
Stock options are worthless when out of the money and a meaningful asset only when significantly in the money. The decision to exercise typically hinges on three factors: tax implications (early exercise locks in AMT or ordinary income at current spread; late exercise compounds the tax liability), liquidity (can you afford the exercise cost and the tax bill), and conviction about the stock's future. The math is the easy part; the timing decision is the hard part.
Frequently Asked Questions
How is the strike discount calculated?
Subtract strike from FMV, divide by strike, multiply by 100. A $30 strike with $50 FMV is a 66.7% gain over strike.
What is FMV for pre-IPO options?
The 409A valuation — the most recent independent fair market value assessment of the company's common stock. Required by US tax law for private companies issuing options. 409A typically updates annually or after material events (financing rounds, acquisitions).
When should I exercise?
Depends on tax, liquidity, and conviction. Early exercise (often with 83(b) election) starts the long-term capital gains clock and locks in the spread at current values. Late exercise compounds the spread but defers the tax bill — and the AMT trap for ISOs.
ISO vs NSO — what's the tax difference?
ISOs (incentive stock options): no ordinary income at exercise but trigger AMT on the spread; long-term capital gains on full appreciation if held 1 year after exercise + 2 years after grant. NSOs (non-qualified): ordinary income on the spread at exercise; capital gains on subsequent appreciation only.
What about RSUs?
RSUs (restricted stock units) are not options — they vest into shares at no cost. There's no strike price. The relevant calculation is grant value × share price at vest; this calculator applies only to stock options.
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Methodology & Review
The change is current FMV minus strike price, divided by strike price. A positive result means the option is in the money (worth exercising on intrinsic value alone); negative means out of the money. The figure ignores time value and option-pricing premium — for early-stage or pre-IPO options, the spread between strike and 409A FMV is usually the relevant comparison.
Written by Ugo Candido · Last updated May 17, 2026.