Stock Option

Dictionary Says

Definition of '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 within a certain period or on a specific date.
 
In the U.K., it is known as a "share option".
Investopedia Says

Investopedia explains 'Stock Option'

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.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Equity Compensation

    This is one way ...
  2. Cheap Stock

    The illegal ...
  3. Stock Trader

    An investor in ...
  4. Employee Stock Option - ESO

    A stock option ...
  5. Index Option

    A financial ...
  6. Long-Term Equity Anticipation ...

    Publicly traded ...
  7. Accelerated Vesting

    A form of ...
  8. Option Chain

    A form of ...
  9. Options Contract

    A contract that ...
  10. Put

    An option ...

Articles Of Interest

  1. The Benefits And Value Of Stock Options

    The pros and cons of corporate stock options have been debated since the incentive was created. Learn more about stock option basics and the cost of stock options.
  2. 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.
  3. Executive Compensation: How Much Is Too Much?

    The proxy statement can help determine whether a CEO is well compensated - or just overpaid.
  4. Getting Acquainted With Options Trading

    Learn more about stock options, including some basic terminology and the source of profits.
  5. Stock Options: What's Price Got To Do With It?

    A thorough understanding of risk is essential in options trading. So is knowing the factors that affect option price.
  6. Globalization: Progress Or Profiteering?

    Proponents of globalization argue that it helps the economies of developing nations and makes goods cheaper, while critics say that globalization reduces domestic jobs and exploits ...
  7. Options Basics Tutorial

    Discover the world of options, from primary concepts to how options work and why you might use them.
  8. 7 Steps To A Hot Commercial Real Estate Deal

    For savvy real estate investors, times of lower prices reveal investment opportunity.
  9. How do you tell whether an option is American or European style?

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


comments powered by Disqus
Recommended
Loading, please wait...
Trading Center