For example, assume a company has 20 million shares outstanding.
Find the number of employee stock options it has outstanding and the exercise, or strike, price per share in the footnotes to the financial statements. In this example, assume a company has 1 million options outstanding with an exercise price of $10.
Subtract the exercise price from the company’s current stock price. In this example, assume the current stock price is $17. Subtract $10 from $17 to get $7.
Divide your result by the current stock price. In this example, divide $7 by $17 to get 0.411765.
Multiply your result by the number of options outstanding. In this example, multiply 0.411765 by 1 million to get 411,765.