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option business definition
- A contract that permits the owner, depending on the type of option held, to purchase or sell an asset at a fixed price until a specific date. An option to purchase an asset is a call and an option to sell an asset is a put. Depending on how an option is used, the risks can be quite high. See also Asian option, conventional option, European option, exercise price, exotic option, expiration date 1, knock-out option, lapsed option, long-term equity anticipation securities, restricted option, stock option 1.
- An addition to a basic model. For example, four-wheel drive is an option on many trucks and SUVs.
- See incentive stock option.
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