Stock Options

Contracts that allow the owners to buy or sell a stock at a specific price before it expires. Options are a popular investment medium, offering an opportunity to hedge positions in other securities, to speculate on stocks with relatively little investment, and to capitalize on changes in the market value of options contracts themselves through a variety of options strategies.

A widely used form of employee incentive and compensation. The employee is given an option to purchase its shares at a certain price (at the market price at the time the option is granted) for a specified period of years.