Stock Option

What does it Mean? 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 within a certain period or on a specific date.
 
In the U.K., it is known as a "share option".
Investopedia Says... 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.

Terms Related Links

Accelerated Vesting
Call
Cheap Stock
Employee Stock Option - ESO
Index Option
Long-Term Equity Anticipation Securities - LEAPS
Option Chain
Options Contract
Put
Reprice
Spread
Strike Price
Writer

Terms Related Links
Mapping Out The Stock Options Landscape - Find out how to navigate this evolving area of the financial markets.

A New Approach To Equity Compensation - The new financial accounting standard known as FAS 123R could take a bite out of your portfolio. Find out why here.

Executive Compensation: How Much Is Too Much? - The proxy statement can help determine whether a CEO is well compensated - or just overpaid.

Trading A Stock Versus Stock Options - Part One - Interested in learning more about these derivatives? We go over some basic terminology and the source of profits.

Trading A Stock Versus Trading Stock Options - Part Two - Interested in learning more about these derivatives? We go over the factors affecting their price.

The Globalization Debate - Learn what both the supporters and critics have to say about this growing global trend.

Options Basics Tutorial - An introduction to the world of options, covering everything from primary concepts to how options work and why you might use them.

How do you tell whether an option is American or European style?

Why are options very active when they are at the money?

FREE Options Trading Manual - Get a free 21-page Book on learning to trade options from the Chicago Board of Trade. If you are new to the option market, this booklet is designed for you!

Is there a method to your trading, or just madness? - Many professional traders say developing a solid approach, and sticking to it, is key to trading longevity. Lind-Waldock offers some timeless trading wisdom in this free downloadable guide.

Trade with optionsXpress! - optionsXpress. Options, stocks and futures. One online account.

add investopedia foot
www.investopedia.com