What does the option to purchase common stock mean?
I recieved a job offer to a company that says i will receive x options to purchase shares of common stock. What does that mean?
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Answer by JKRB
A stock option is a privilege sold by one party to another that gives the buyer the right, but not the obligation, to buy (call) or sell (put) a stock at an agreed-upon price within a certain period or on a specific date.
In the U.K., it is known as a "share option".
American options can be exercised anytime between the date of purchase and the expiration date. European options may only be redeemed at the expiration date. Most exchange-traded stock options are American.
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