That rational approach has become the norm in a world in which stock options are still very much with us. Seventeen percent of public companies and a large number of private companies offer them. They may now see it more as a lottery ticket, not a guarantee of becoming a millionaire in 12 months. Companies that gave options but low salaries must cope with employees soured by the market downturn. In some cases, they're allowing workers to hand over their options in exchange for fresh options the company gives out after a six-month period.
Tax is another worry.
The next year they had a big tax bill because the tax is based on when you exercised, not the current price. With incentive stock options, the paper profit isn't counted for normal income tax purposes and the growth can qualify for favorable capital gains rates if shares are held more than a year. But using incentive options to buy company shares triggers the alternative minimum tax, a calculation designed by Congress to make sure the rich don't avoid taxes altogether. While everybody signs and ignores it, it does make good sense to seek professional advice.