Fixed Price Purchase Option

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Dictionary Says

Definition of 'Fixed Price Purchase Option'

The right, but not the obligation, to buy a leased item at a predetermined price. With a fixed price purchase option, the purchase price is established when the lease terms are agreed upon. The lease agreement should also describe when the option can be exercised (usually at the end of the scheduled lease term). Types of property that may come with fixed price purchase options include automobiles, real estate and heavy equipment.

 
Investopedia Says

Investopedia explains 'Fixed Price Purchase Option'

The advantage of the fixed price purchase option for the lessee is that the lessee knows with certainty what the cost to purchase the property will be. By contrast, with a fair market value lease, the consumer also has the option to purchase the leased item at the end of the lease term, but the price will be the item's fair market value at the lease's expiration. The consumer will not know in advance how much the purchase price will be.

 
Search results for

'Fixed Price Purchase Option'

  • Should Employees Be Compensated With Stock Options?

    http://www.investopedia.com/articles/analyst/091202.asp
    ... The Black-Scholes option-pricing model is a good academic ... The strike price is a known
    obligation. The unknown value above/below that fixed price is beyond the ...

  • Pin Down Stock Price With Real Options

    http://www.investopedia.com/articles/03/012803.asp
    ... the right, but not the obligation, to purchase the home at the offering price any
    time in ... to assign a positive value to uncertainty - a fixed price can be ...

  • Rent To Own; Own To Rent

    http://www.investopedia.com/articles/mortgages-real-estate/09/real-estate-purchase-options.asp
    ... real estate options are a financing method where the purchaser initially purchases
    an option to purchase a property at a later date. The future price of the ...

  • Rent-To-Own Real Estate Full Of Pitfalls

    http://www.investopedia.com/articles/mortgages-real-estate/08/rent-to-own.asp
    ... However, if the price is too high, the lessee can just walk away ... will not qualify
    for the mortgage loan required to make the purchase. ... 30 Year Fixed, 3.80%, 3.80 ...

  • CFA Level 1 Study Guide - Derivatives - Options: Basic ...

    http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/options-basic-characteristics.asp
    ... Fixed Income Investments: 14.1 Introduction; 14.2 Bond Features; ... Duration; 14.49
    Convexity; 14.50 Price Value of a ... Straddles and Strangles; 15.33 Option Prices and ...

  • Option Price-Volatility Relationship: Avoiding Negative Surprises

    http://www.investopedia.com/articles/optioninvestor/05/020205.asp
    ... Whether you are planning to purchase a put or call option, it pays to know more
    than just the impact of a move of the underlying on your option's price. ...

  • Get The Most Out Of Employee Stock Options

    http://www.investopedia.com/articles/optioninvestor/07/esoabout.asp
    ... A stock option is a contract issued by an employer to an employee to purchase a
    set amount of shares of company stock at a fixed price for a limited period of ...

  • How is a put option exercised?

    http://www.investopedia.com/ask/answers/06/putoptionexcercise.asp
    ... The opposite of a put option is a call option, which gives the holder the
    right to purchase a set amount of shares at a set price. ...

  • CFA Level 1 Study Guide - Fixed Income Investments - Pricing Bonds ...

    http://www.investopedia.com/exam-guide/cfa-level-1/fixed-income-investments/pricing-bonds.asp
    ... Fixed Income Investments: 14.1 Introduction; 14.2 Bond Features; ... Duration; 14.49
    Convexity; 14.50 Price Value of a ... Straddles and Strangles; 15.33 Option Prices and ...

  • What's the difference between a regular option and an exotic ...

    http://www.investopedia.com/ask/answers/05/063005.asp
    ... buys a call option has essentially bought a standardized right to purchase a specific
    amount of an underlying asset at the agreed upon strike price, while a ...

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