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What is the difference between a same-day sale, a sell-to-cover, and a cash exercise?

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A same-day sale allows you to exercise stock options and then immediately sell the resulting shares for cash. The exercise cost and any taxes withheld are deducted from the sale proceeds. A sell-to cover allows you to exercise stock options and sell just enough of the shares to cover the exercise cost and any taxes due, with the remaining shares held. A cash exercise allows you to exercise stock options and pay cash to cover the cost of the shares, along with any taxes due. The funds to cover this exercise must be available in your E*TRADE Securities brokerage account. more
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