what is locked in 
locked in describes a situation wherein an investor is unwilling or unable to trade a security because of regulations taxes or penalties associated with doing so this may occur in an investment vehicle such as a retirement plan that an employee may not access before a specified retirement date understanding locked inif there is an increase in the value of stocks held by an individual the shareholder will be subject to a capital gains tax with some exceptions to reduce the tax burden an investor could shelter these gains in a retirement account the individual is considered locked in because if a portion of this investment is withdrawn prior to maturity the owner will be taxed at a higher rate than if they had waited locked in securities can describe stock options and warrants offered to employees under incentive programs that promote company loyalty and encourage strong performance many of these programs come with mandatory vesting periods during which the employee has been granted the securities but may not yet exercise them meaning converted to cash or stock typically such shares or warrants must be held for several years before they can be exercised there may be phases of the locked in period when at stipulated intervals the shares change ownership or tax status even after options or warrants have been converted into stock and granted to an employee there may be another holding period before they can sell those shares in such instances the employees usually receive the options at the market price at the time they were granted which may represent a deep discount to the market price when they are exercised depending on when the stock is sold the proceeds might be taxed at a lower rate than initially imposed reasons for locked in shares