stock option

Stock Option

A privilege, sold by one party to another, that gives the buyer the right, but not the obligation, to buy (call) or sell (put) a stock at an agreed-upon price during a certain period of time or on a specific date.

Notes:

American options can be exercised anytime between the date of purchase and the expiration date. European options may only be redeemed at the expiration date. Most exchange-traded stock options are American.

In the U.K., a Stock Option is knowns as a "Share Option."

See also: Call, Cheap Stock, Derivative, Employee Stock Option (ESO), Index Option, LEAPS, Leverage, Option Chain, Options Contract, Put, Spread, Strike Price, Writer

---

Stock option

An option whose underlying asset is the common stock of a corporation.

---

stock option

An option to buy or sell a specific number of shares of stock at a fixed price until a specified date. See also call, capped-style option, incentive stock option, put.