Skip to main content
option

option

256 7.4
A right to buy or sell something at a set price before a set time
  • noun
  • /ˈɑpʃən/
  • Specialized
translation icon : opción
  • The patient's insurance coverage determines the patient's options for hospital admission, with some policies being more restrictive.
  • call option
  • put option
  • exercise the option

So we've got things like forwards, options or swaps.

Autoplay Next

Examples

  • Well, if the stock price is less than the exercise price, the option is worthless, right?

  • Now there are two types of options, call options and put options.

  • So you want to buy an option on the stock.

  • I have a lease with an option to buy.

  • Surgery is often reserved as a second-line option if medical therapy fails.

    Academic text (2008)
  • Investors can buy an option to purchase shares at a predetermined price before the deadline.

  • He has an option to sell his property at the agreed price within the next six months.

  • The company granted its employees stock options as part of their compensation package.

Antonyms

524 3.2

A duty you feel to do something because it is right or someone helped you

Compounds

stock option
  • Specialized
32 4.8

A right to buy company shares later at a fixed price, often given to employees

22 1.3

A choice that is most suitable among other choices

nuclear option
  • Literature
8 6.3

An extreme action taken only when nothing else will work

put option
  • Specialized
3 8.3

A contract that gives you the choice to sell an investment at a fixed price within a set time

A choice of where to put money to try to make more money

call option
  • Specialized
2 7.7

A contract that lets someone choose to buy something of value at a set price for a limited time

default option
  • Specialized
1 3.7

An option chosen automatically when you do not pick another

local option
  • Formal
1 6.8

A local area's choice to accept or reject a law, often decided by vote

Bermudan option
  • Specialized
8.9

A financial contract you can use to buy or sell on specific dates during its life

covered option
  • Specialized
8.6

A way to sell an option while you already own the shares the buyer may buy

9.5

A right for a friendly investor to buy key assets before others to stop a takeover

incentive option
  • Specialized
7.7

A right to buy company stock at a set price if the company meets business goals

7.4

An offer that lets employees buy company shares later if the company meets its goals

naked option
  • Specialized
9.9

To sell a right to buy or sell a stock without owning it and risk large losses

An easier choice people make to avoid hard work or trouble

How Risky

stock-index futures
  • Specialized
1 7.2
option
  • Specialized
256 7.4
stock
3.5
government bond
  • Specialized
14 2.7

Surface Forms

option singular
options plural

Morphology

option = opt (semi-transparent) = opt + ion

Built from 'opt' + '-ion', but the specialized legal/financial sense 'a contractual right' is a domain-specific extension not fully predictable from the general sense 'choice'.

Etymology

Option in finance keeps the same root optio 'to choose' and means a formal 'choice' or right to buy or sell at a set price within a time period, so the name shows you have the power to decide later.