option

Definition:

an arrangement by which one person (called an ‘option holder’) is entitled, at some time in the future, to buy something from, or to sell something to, a second person (called the ‘writer of the option’) at a price (called the ‘exercise price’ or ‘striking price’) fixed at the time of making the arrangement, or may choose not to buy or sell the thing. An option to buy is called a ‘call option’. An option to sell is called a ‘put option’.



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