| an option giving the holder, usually an officer or employee, the right to buy stock of the issuing corporation at a specific price within a stated period. |
| stock option n. A right to buy or sell specific securities or commodities at a stated price within a specified time. |
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 Commentary
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.
Related Links
Options Basics Tutorial
Trading A Stock Versus Stock Options - Part One
Trading A Stock Versus Trading Stock Options - Part Two
See also: Call, Cheap Stock, Derivative, Employee Stock Option - ESO, Index Option, Leverage, Long-Term Equity Anticipation Securities - LEAPS, Option Chain, Options Contract, Put, Spread, Strike Price, Writer
stock option