system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5:What does a company mean by stock options?
gpt
They are giving you the option (i.e. choice) to buy stock at a set price at a later date typically after they IPO or are purchased. So, let's say your option price is $20 and you have 100 shares. The stock IPO's at $50. You would have to buy your shares for $2000 and then sell them for $5000 to get your money out. Or, if someone were buying the company they would offer you a price for your options and the same thing would happen.