Definition for: Option
An "option" gives the holder of the option the right, but not the obligation, to buy or sell an asset at a designated price before a given date. The most common type of option is a stock option granted to employees. Other options include call options (giving the holder the right to buy stock at a designated exercise price) and put options (giving the holder the right to sell stock at a designated price). Holders of call options are betting that the price of the underlying stock will go up, and holders of put options are betting that the price of the underlying stock will go down.
