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Option priceAlso called the option premium; the price the buyer of the options contract pays for the right to buy or sell a security at a specified price in the future.Option price Similar MatchesPut optionPut optionAn option which gives the holder the right but not the obligation to sell shares (or other financial instrument) at a fixed price on or before a given date.Every put option has an exercise price. This is the price at which the holder is entitled to sell the shares to the option writer. If the price of the share falls below the exercise price, the option is said to be 'in the money' and to have an intrinsic value which is equal to the difference between the two.For instance, an option which entitles the holder to sell shares in XYZ at 80p has an intrinsic value of 8p if the price of XYZ's shares falls to 72p.If the price of XYZ's shares rose to 90p, on the other hand, the put option would have no intrinsic value because it would not be in the holder's interests to sell the shares at 80p. The only value which the put option would then have would be its time value. Equity optionsEquity optionsOptions on the shares of companies. Equity options are traded in the UK at the London International Financial Futures and Options Exchange (LIFFE) and the London Securities and Derivatives Exchange (OMLX). Incentive stock optionIncentive stock optionA stock option, which specifies a set number of shares at a specified option price extending over a given period, which is free of tax when granted and when exercised. If the share is subsequently sold two years or more after the grant date or one year or more after the transfer to an employee, a reduced capital gains tax liability on profits will apply. Stock optionStock optionAn option whose underlying asset is the common stock of a corporation. Lease With Option To PurchaseLease With Option To PurchaseA lease under which the lessee has the right to purchase the property. The price and terms of the purchase must be set forth for the option to be valid. The option may run for the length of the lease or only for a portion of the lease period. Legal Description: A description by which property can be definitely located by reference to surveys or recorded maps. Sometimes referred to simply as the legal. Further Suggestionslapsed optionFLEX Options Option agreement Option holder Virtual currency option Intrinsic value of an option Class of Options Stock index option Over the Counter Option Options contract multiple Out of the money option qualified stock option Gnma (government National Mortgage Association) Options Nonqualifying stock option Binomial option pricing model Path dependent option MONEP (Marche des Options Negociables de Paris) Exercising the option Chicago Board Options Exchange (CBOE) Qualifying stock option One-way option option premium Tax deferral option European style option Registered options trader |
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