A stock option is a contractual right granted by a company to the employee to purchase a defined number of shares of the company's stock at a fixed price within a specified period of time.

Question

Quizplus · Accepted Answer

Stock options are indeed contractual rights given to employees (and sometimes other parties) allowing them to buy the company's stock at a predetermined price for a certain period, often used as a part of compensation packages to incentivize performance and align the interests of employees with those of shareholders.

A Stock Option Is a Contractual Right Granted by a Company