stock options

stock option

noun
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.

Origin:
1940–45

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American Heritage
Cultural Dictionary

stock options definition


The right to purchase a company's shares at a future date at an agreed price. Companies often give stock options to their executives as an incentive to improve the company's performance and boost its share price. If the share price has risen above the agreed price of the option by the time the option is exercised, the executive stands to make a considerable profit.

The American Heritage® New Dictionary of Cultural Literacy, Third Edition
Copyright © 2005 by Houghton Mifflin Company.
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