A stock option is a right to buy:

Question

Quizplus · Accepted Answer

A stock option grants the holder the right to buy shares of the company's stock at a predetermined price at a future date. This predetermined price is known as the exercise price or strike price. The option gives the holder the option to buy the shares, but is not an obligation to do so. If the stock price rises above the strike price, the holder can exercise the option to buy the shares at a discount and sell them at the higher market price, resulting in a profit. If the stock price remains below the strike price, the holder can simply let the option expire without exercising it.

A Stock Option Is a Right to Buy