•  Don't sink -- consider all of your investment options instead.

An estimated 10 million or more American employees now hold stock options, and for increasing numbers of them, the potential for profit seems to be sinking along with share prices.

The problem is that, thanks to stock market declines this year, particularly of the NASDAQ, the options of many employees are now "under water" -- that is, the stocks in question are trading at levels below the exercise price of the options. Sometimes, especially in the case of Internet companies, the stocks are trading so far under the exercise prices that the situation appears to be completely hopeless. Employees can't be blamed for ignoring the options and even thinking about jumping ship.

But is the situation really as hopeless as it appears to be? There's an old investment adage that can be applied to many of these "under water" situations: Buy low, sell high.

Here's how it works: Employees who receive stock options as part of their compensation package should view those options as an investment. That is because stock options are part of compensation and thus replace part of the salary that would otherwise be paid. They are an investment on the part of employees.

Now that the prices of many stocks have sunk, the idea for investors isn't necessarily to give up, but to make the same kind of investment decisions that professional investors make all the time. In the case of stock options, here are three possible investment decisions one can make:

1. Obtain Additional Options. When stock prices go down, professional investors often use such declines as an opportunity to add to their holdings. You can do the same with stock options. There's nothing that says stock options need to be a one-time grant at the time you sign on as an employee. If your company's stock price has declined, consider approaching management for additional options -- valued at the new lower price. It helps if you are due for a salary review, so you can tie the request for additional options to an overall request for additional compensation. But such a request can be made in advance of a formal review, and positioned as a demonstration of your continued enthusiasm for and confidence in the company's long-term value.

2. Seek Repricing of Existing Options. As an investor, there's nothing better than being able to adjust the price you pay for stock downward, based on market performance. Most investors never get that opportunity, of course, but companies are permitted to reprice stock options lower, based on price declines, and a few companies have taken that route. Repricing options helps boost employee morale by providing hope for potential future gains on the options. The main problem associated with repricing options is that companies must take a charge against their profits for the repricing, and in this age of renewed focus on earnings, many companies would just as soon avoid additional burdens on profits.

3. Look for Greener Pastures. Sometimes investors decide after a stock has gone down that the company doesn't have the promise they thought it did, and they bail out. For employees who hold stock options and decide that the company they work for likely won't recover its stock losses, it may be time to look for a new position -- at a company whose stock options offer greater promise.

Just because your stock options are under water doesn't mean you should make believe they don't exist. Consider all your investment approaches.