Employees that receive stock options get the right to buy stocks at a predetermined price, or strike price. You “exercise your options” when you purchase the underlying stocks at strike price. The company is legally bound to set your strike price at what is deemed fair market value of the company stock when the options are granted to you. When the strike price is equal to fair market value, the options are considered “in the money.”
So, if you were granted “in the money” stock options with strike price of $1, and you were to exercise your options on the same day, you would pay $1 for each stock, and own that stock valued at exactly $1. You would have a net gain of $0. As company grows over time, the value of stock would rise.