Investopedia

Non-Qualified Stock Option - NSO

Dictionary Says

Definition of 'Non-Qualified Stock Option - NSO'

A type of employee stock option where you pay ordinary income tax on the difference between the grant price and the price at which you exercise the option.
Investopedia Says

Investopedia explains 'Non-Qualified Stock Option - NSO'

NSOs are simpler and more common than incentive stock options (ISOs).

They're called non-qualified stock options because they don't meet all of the requirements of the Internal Revenue Code to be qualified as ISOs.

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