What Is An Exercise Window?

An exercise window is the period during which an employee can purchase (or “exercise”) their stock options after they’ve vested. If you’ve been granted stock options through an equity compensation plan, you don’t automatically own the shares—you have the right to buy them at a set exercise price, and the exercise window tells you when you can do that.

For example, let’s say you have 1,000 stock options that have vested and an exercise price of $5 per share. If the company’s current share price is $15, you may choose to exercise your options—buy the shares at $5, potentially realizing a gain of $10 per share. But you can only do this within your exercise window.

Missing that window may mean losing your right to exercise entirely.

Types of Exercise Windows:

• While Employed: You can usually exercise vested options any time before they expire—often within 7–10 years from the grant date.
• Post-Termination: If you leave the company, you typically have a limited window—often 90 days—to exercise any vested options. After that, they usually expire.
• Blackout Periods: Public companies may have blackout periods during earnings season or major announcements where employees are temporarily barred from exercising or selling shares.
  

Why Exercise Windows Matter:

• Missing a deadline means forfeiting vested options.
• You may face tax implications depending on when and how you exercise.
• Knowing your window helps you plan your exit timing, especially if you're switching jobs.
  

Things to Watch Out For:

• Short post-exit windows: Especially common in early-stage startups or standard ISO plans.
• Expiration dates: Even if you stay with the company, options eventually expire.
• Liquidity: Can you actually sell the shares after exercising, or will you be holding them until a liquidity event like an IPO or acquisition?
  

Pro Tip:

If you’re planning to leave your company, review your stock option agreement carefully. Know how long your post-termination exercise window is, and consider talking to a financial advisor or tax professional to understand your best move.