[phuff]

Options are an opportunity to buy stock at a set price (the strike price). So if you're granted 10,000 options at $1 each, and when you sell them the company is valued at $2 a share, you'll make $10,000 off your options. If you go through a company like e-trade you don't have to actually have the $10,000 to sell them. You can do the trade without the $10,000 initial investment to buy the shares specified by your option grant(at least in my case with a previous employer this was true).

Since the option grant is just an offer to buy stock (vs. a stock grant which is an actual share and doesn't cost anything to sell), once you leave the company that offer to buy stock is typically rescinded after a certain period of time.