Overhang

Overhang

Calculated as stock options granted, plus the remaining options to still be granted, and then divided by the total shares outstanding.

Notes:

A high percentage for the overhang is usually a bad thing. It means there is a growing possibility that the options will be exercised and dilute the company's stock.

See also: Employee Stock Ownership Plan (ESOP), Exercise, Incentive Stock Option (ISO), Nonqualified Stock Option (NSO), Option

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Overhang

Used in the context of general equities. Sizable block of securities or commodities contracts that, if released on the market, would put downward pressure on prices; prohibits buying activity that would otherwise translate into upward price movement. Examples include shares held in a dealer's inventory, a large institutional holding, a secondary distribution still in registration, and a large commodity position about to be liquidated.