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Home > QFINANCE Dictionary > Definition of option

Definition of

option

  • 1. Stockholding & Investments

    contract for trading rights a contract for the right to buy or sell an asset, typically a commodity, under agreed terms.

    Related definitions of "option"

  • 2. Business

    opportunity to buy or sell on agreed terms an agreement that somebody may buy or sell a specific asset on predetermined terms on or before a future date

option - Related Articles

  • Employee Stock Options

    Best Practice

    Employee stock options are a component of the compensation package of many employees and executives. As well as providing a mechanism for linking pay with the performance of the company’s stock price, stock options can facilitate the recruitment and retention of employees. The effectiveness of stock
    By Peter Casson

  • Real Options: Opportunity from Risk

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    Real options arise from the ability of economic agents to adjust their behavior to maximize the values of their assets or contracts.
    By David Shimko

  • Option Pricing

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    There are two sorts of options in stock market trading: call and put. Option pricing uses mathematical models to calculate the value of a stock option and how it changes in response to changing conditions.

  • Understanding Real Options

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    This checklist provides an overview of real options, and demonstrates how they can be used in practice.

More

Definitions of ’option’ and meaning of ’option’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’option’ and other financial terms with our online QFINANCE Financial Dictionary.

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