How long do I have to exercise options after leaving?

Your plan document decides. Older agreements commonly use a short window measured from the last day worked, and current law allows a longer period for qualified options. Get the exact deadline date in writing before you file anything.

Should I exercise and hold or exercise and sell?

Selling immediately converts paper gain into real gain and caps the alternative minimum tax exposure. Holding aims for capital-gains treatment but can leave you paying tax on a value that later falls. Decide on cash you can afford to lose.

What happens to unvested RSUs when I leave?

They normally forfeit on the separation date unless the agreement accelerates them. Check the last-day cutoff, then negotiate acceleration of a defined period in the exit package before you sign the release.

Can I still sell while I am under a trading blackout?

Former-employee windows vary. Some companies keep ex-holders inside the blackout calendar, which can push a planned sale past the exercise deadline. Ask the administrator for the rule before you commit to a hold strategy.

Exercising Options After Leaving a US Job

Leaving starts the option clock: ISO windows (often 90 days) run from your last day, exercise needs cash, and AMT hits in the exercise year. Work the plan documents before the window closes.

Three Numbers Before You Exercise

Window: your plan's post-termination exercise period (PTEP). 90 days is the ISO default; some plans extend months for departure cohorts. See the AMT guide for the mechanics.
Exercise cash: (FMV − strike) × shares + tax. Cashless exercise (sell-to-cover) is common for NSOs; ISO rules limit it.
AMT: the bargain element enters AMT in the exercise year, on paper gains. Selling immediately caps the AMT to actual gain; holding risks the AMT bill on gains that collapse later.

Sale Strategy After Exit

Sell at FMV after exercise to convert AMT exposure to real gains; holding for capital-gains treatment is the long-lead play. Know the company's trading window rules for ex-employees — insider sale rules survive departure, and SEC 10b5-1 plans bind you post-exit (sec.gov rules).

Acceleration and PTEP asks belong in the severance negotiation: the asks are in the severance scripts guide, and executive-level math in the 280G guide.

Put the rule into action

Write the letter with the free Severance Package Negotiation Letter generator. The state pages carry the local payout and notice windows, and the application tracker keeps the follow-up date in writing.

Put the rule into action

Equity Vesting (RSU & Options) — what it means and what to do

Read The Documents That Set Your Clock

Your post-exit exercise window is a plan term, not a default. Collect the documents in your last week, because the clock usually starts on your last day worked and the copy is inside systems you lose access to.

The grant agreement: exercise window after termination, forfeiture rules, and any change-of-control clause.
The plan document: post-termination exercise period for each award type, and whether departure cohorts get a longer window.
The vesting schedule and the date each tranche vests, including anything that vests after your last day.
The most recent 409A valuation date and the strike price for each grant.
Company trading-window rules for former employees, and any blackout that applies after you leave.

Do not quote 90 days as the rule without checking. The equity vesting definition explains the difference between option windows and RSU vesting, and the vesting calculator shows what a tranche vesting inside the notice period is worth.

ISO Versus NSO After Departure

Two tax paths change the cost of exercising, and the award type decides which one you are on.

Incentive options: the qualified window is typically short after termination, commonly 90 days in older plan language, and recent law has lengthened the post-termination exercise period for qualified options. Confirm which rule your grant follows in the agreement.
Non-qualified options: exercise gain is ordinary wages, reported on a W-2 or an equivalent statement, and sell-to-cover is usually available.
AMT: for incentive options, the spread between fair market value and strike enters alternative minimum tax in the exercise year, on paper gain you have not sold.
Double-tax risk: pay AMT on an exercise in, sell later below that value, and the tax benefit does not fully return.

Model it before you act: exercise cost is shares times the spread, plus the tax on the exercise year. If cash is the constraint, compare exercising a subset against negotiating an extended window in the exit package. Run the acceleration and window asks through the severance negotiation letter while the deal is still open.

The Exercise Decision Checklist

Decide with a written sequence, then act once.

Confirm the exact deadline date in writing from the plan administrator, with the date it starts from.
Confirm whether unvested shares forfeit on your last day or on a later date.
Get the current fair market value and the strike for each grant, and write the spread per share.
Compute total exercise cash, then compute the tax consequence in the exercise year.
Decide sell-immediately versus hold. Selling immediately caps AMT exposure to real gain; holding risks tax on a gain that collapses.
File the same disposition on any 83(b) or ISO Form 3921 record you already filed, and keep copies.

Work the paperwork trail inside the equity and tax section, and confirm the payout method in writing: a cashless exercise needs a broker route that still works after your payroll access ends. Keep every confirmation dated, because a missed window turns the gain into a forfeited award.

Award Type	Post-Exit Rule To Confirm	Tax Event
Incentive options	Exercise window after termination	AMT on the spread in the exercise year
Non-qualified options	Exercise window and sell-to-cover	Ordinary wages at exercise, W-2 line
RSUs	Vesting cutoff date at separation	Ordinary income at vest, withholding at vest
ISO extended window	Whether the newer statute applies to your grant	AMT deferral to the year of sale
Early exercise	Unvested shares and the 83(b) election	Taxed at fair value on exercise, if elected

Before you rely on a date or an amount on this page, check it against the California job exit rules page and the New York job exit rules page. Rules move, and those pages carry the current text.

Frequently Asked Questions

How long do I have to exercise options after leaving?: Your plan document decides. Older agreements commonly use a short window measured from the last day worked, and current law allows a longer period for qualified options. Get the exact deadline date in writing before you file anything.
Should I exercise and hold or exercise and sell?: Selling immediately converts paper gain into real gain and caps the alternative minimum tax exposure. Holding aims for capital-gains treatment but can leave you paying tax on a value that later falls. Decide on cash you can afford to lose.
What happens to unvested RSUs when I leave?: They normally forfeit on the separation date unless the agreement accelerates them. Check the last-day cutoff, then negotiate acceleration of a defined period in the exit package before you sign the release.
Can I still sell while I am under a trading blackout?: Former-employee windows vary. Some companies keep ex-holders inside the blackout calendar, which can push a planned sale past the exercise deadline. Ask the administrator for the rule before you commit to a hold strategy.

The exercise window, the forfeiture clause, and the change-of-control trigger are plan documents, and the tax year is decided by the window, not by your last day. Confirm the window in writing with the plan administrator, and confirm the separation-side windows — final pay, PTO payout, and the claim deadline — with the state agency named on the state rule pages. Put the unit count, the cliff, and the months served through the vesting calculator so the acceleration ask has a number attached, and write the ask with the severance negotiation generator.