Legal Definition and Related Resources of Option

Meaning of Option

A privilege existing in one person who has given legal consideration for acquiring the same, giving such person the right to call for the delivery or of making the delivery of, or both, certain merchandise or specified securities , if he chooses, at any time within an agreed period , at a fixed price . See Western U. Teleg. Co. v Brown, 253 U.S. 101, 40 S.Ct. 460, 64 L.Ed. 803. The essence of an option is that while all the essential terms of the purchase and sale are agreed upon between the parties , such as the price and the time of completing the purchase or the sale, the holder of the option is not compellable by the other party to exercise the option. See Warner Bros. Pictures v Prodel, 31 Cal.2d 766, 192 P.2d 949. Also see §2-311 ofU.C.C.

Option Alternative Definition

A right of choice or election. Sometimes applies specifically to contracts whereby one purchases the right for a certain time, at his election, to demand and receive or to deliver property at a stated price. See Gambling Contract.

Financial Definition of Option

Gives the buyer the right, but not the obligation, to buy or sell an asset at a set price on or before a given date. Investors, not companies, issue options. Investors who purchase call options bet the stock will be worth more than the price set by the option (the strike price), plus the price they paid for the option itself. Buyers of put options bet the stock’s price will go down below the price set by the option. An option is part of a class of securities called derivatives, so named because these securities derive their value from the worth of an underlying investment.

Synonyms of Option

(Choice), noun

  • alternate choice
  • alternative
  • choice
  • free decision
  • free selection
  • free wiK
  • freedom freedom of choice
  • leave
  • liberty
  • opportunity pick
  • power to choose
  • preference
  • right of choice
  • irlecu: r
  • Associated Concepts: election between options
  • exercise of option
  • options after default

(Contractual provision), noun

  • acquired right
  • agreement
  • allowance
  • approval
  • authorization
  • consent
  • continuing offer
  • continuing offer to buy
  • favor
  • grant
  • guaranty
  • license
  • power
  • prerogative
  • privilege
  • proviso
  • right
  • right to buy or sell
  • sanction
  • stipulation
  • term
  • understanding Associated Concepts: conditional option
  • continuing option
  • exercise of an option
  • first option
  • irrevocable option
  • option to buy
  • option to lease
  • option to purchase
  • option to renew
  • optian to sell

Related Entries of Option in the Encyclopedia of Law Project

Browse or run a search for Option in the American Encyclopedia of Law, the Asian Encyclopedia of Law, the European Encyclopedia of Law, the UK Encyclopedia of Law or the Latin American and Spanish Encyclopedia of Law.

Option in Historical Law

You might be interested in the historical meaning of this term. Browse or search for Option in Historical Law in the Encyclopedia of Law.

Legal Abbreviations and Acronyms

Search for legal acronyms and/or abbreviations containing Option in the Legal Abbreviations and Acronyms Dictionary.

Related Legal Terms

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Mentioned in these terms

Alternative, , Custom, Facility Of Payment Clause, First Right Of Refusal, Judicial Discretion, Precatory Trust, , .


You might be interested in these references tools:

Resource Description
Option in the Dictionary Option in our legal dictionaries
Browse the Legal Thesaurus Find synonyms and related words of Option
Legal Maxims Maxims are established principles that jurists use as interpretive tools, invoked more frequently in international law
Legal Answers (Q&A) A community-driven knowledge creation process, of enduring value to a broad audience
Related topics Option in the World Encyclopedia of Law


This definition of Option is based on the The Cyclopedic Law Dictionary . This entry needs to be proofread.

Vocabularies (Semantic Web Information)

Resource Description
Topic Map A group of names, occurrences and associations
Topic Tree A topic display format, showing the hierarchy
Sitemap Index Sitemap Index, including Taxonomies
https://legaldictionary.lawin.org/option/ The URI of Option (more about URIs)

Option in Law Enforcement

Main Entry: Law Enforcement in the Legal Dictionary. This section provides, in the context of Law Enforcement, a partial definition of option.


See Also

  • Law Enforcement Officer
  • Police
  • Law Enforcement Agency

Further Reading

Option Definition (in the Accounting Vocabulary)

The New York State Society of Certified Public Accountants offers the following definition of Option in a way that is easy for anybody to understand: Right to buy or sell something at a specified price during a specified time period.

Concept of Option in the context of Real Property

A short definition of Option: A right, which acts as a continuing offer, given for consideration, to purchase or lease property at an agreed upon price and terms, within a specified time.

Concept of Option in the context of Real Property

A short definition of Option: A right, which acts as a continuing offer, given for consideration, to purchase or lease property at an agreed upon price and terms, within a specified time.


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