Stock option
Stock option is a financial option that allows its owner to purchase a share of stock at a fixed price, called the strike price or the exercise price, no matter what the actual price of the stock is. Stock options always have an expiration date, after which they cannot be exercised.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Stock option. Allows its owner to purchase a share of stock at a fixed price, called the strike price or the exercise price, no matter what the actual price of the stock is. Stock options always have an expiration date, after which they cannot be exercised.
According to the HRBoK Guide,
- Stock option. An employee's right to buy or sell shares in the company. A benefit that gives employees the right to buy or sell stock in their company at a certain price for a specific period of time.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
