Over 700 finance terms, Shmooped to perfection.
It's not about how much you pay to get in to your gym. It's about the strike price of the stock option you own. Let's say you joined GerbilDating.com in its infancy. You were granted 100,000 options at a $2 strike price. It's now publicly traded on NASDAQ. The stock just hit $40. You can exercise your options, paying $2 to GerbilDating.com to buy out that share of stock, and then sell it for $40 through your broker to net $38 in gain per share.