Stock Option
/ˈstɒk ˌɒpʃən/
Definitions
- (n.) A contractual right granted to an employee or investor to purchase company stock at a specified price within a set time.
The executive exercised her stock option to buy shares at the predetermined price.
- (n.) A financial derivative granting the holder the right but not the obligation to buy or sell stock at a set price before expiration.
He speculated on the stock option to profit from expected market movements.
Forms
- stock option
- stock options
Related terms
See also
Commentary
In legal drafting, it is important to distinguish employee stock options from market-traded stock options due to differing regulatory and tax implications.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.