Startup Terms Glossary
What are Stock Options?
When an investor has a stock option, it means that they are entitled to be able to sell their shares in stock at a pre-determined time and for an agreed upon price. Stock options give investors the right to sell their shares; it’s important to note that there is no obligation for stockholders to do so.
Stock Options Examples
Examples of features of stock options:
- Example 1. Two types: put options and call options
- Example 2. Terms are defined in a legal contract
- Example 3. Investors bet on whether a stock’s value will rise or fall
- Example 4. If investors bet correctly, a higher return on their investment is achieved
Here’s another web page about stock options.