Cheap Stock
The illegal practice of issuing stock options at artificially low prices shortly before an initial public offering.
Often underwriters will require a company to have more qualified management before they can go public. They attract these qualified individuals by giving options with a low exercise price.
Investopedia Commentary
Any option granted at a price that turns out to be only a small fraction of the actual IPO price will likely be regarded as cheap.
Related Links
Stock Basics Tutorial
See also: Exercise Price, IPO, Option