<p>is this a short position of a regular option?</p><p>but it is strange that it costs nothing.</p><p>an option should cost some money.</p><p>an executive stock option costs nothing(?)</p><p></p><p>i don't know</p>
maybe a kind of conditional put option. if S<K, it has no value and you have no incentive to excise it, so you need to pay a part of option fee; if S>K, the holder will excise the option, and in this case the company undertake the option fee and you just share the benifit with the company. the company is an agency in stead of an underwriter. u and the company mutually share the cost and the benifit.