A contract that permits one party to buy from (or sell to) the other party something at a prespecified price during a prespecified period of time, leaving the choice of whether to do this or not (whether to "exercise" the option) up to the first party, which buys the option. Options exist for many assets, including foreign exchange.

Browse by Subjects

Popular Economy Terms

annual depreciation provision
industrial production
price to earnings ratio (P/E)
product cost
bad debt expense
mixed economy
factors of production