Define: Option

UK Accounting Glossary

Definition: Option


Quick Summary of Option


Buying the rights to purchase an asset for a certain period of time. For example, a business may option an asset for 6 months for 10% of the sale cost. During this time they do not own the asset; however, the company that does own it is not allowed to sell it during this period.




What is the dictionary definition of Option?

Dictionary Definition


Options are financial instruments that are derivatives or based on underlying securities such as stocks.

  1. One of the choices which can be made.
  2. The freedom or right to choose.
  3. finance, legal A contract giving the holder the right to buy or sell an asset at a set strike price; can apply to financial market transactions, or to ordinary transactions for tangible assets such as a residence or automobile.

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Full Definition of Option


Buying the rights to purchase an asset for a certain period.

For example, a business may option an asset for 6 months for 10% of the sale cost.

During this time they do not own the asset; however, the company that does own it is not allowed to sell it during this period.


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Option FAQ's



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https://payrollheaven.com/define/option/
Modern Language Association (MLA):
Option. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. November 15, 2019 https://payrollheaven.com/define/option/.
Chicago Manual of Style (CMS):
Option. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/option/ (accessed: November 15, 2019).
American Psychological Association (APA):
Option. PayrollHeaven.com. Retrieved November 15, 2019, from PayrollHeaven.com website: https://payrollheaven.com/define/option/

Definition Sources


Definitions for Option are sourced/syndicated from:


This glossary post was last updated: 28th December 2018.