Options and Convertible Securities Definitions 8-*Options and Convertible Securities • May 5th, 2020
An Option is a contract giving the holder the right to buy or sell an asset at (or before) a future date at a specified price. . A Call Option is a contractual right to buy an asset at a specified price on (or before) a specified date. . A Put Option is a contractual right to sell an asset at a specified price on (or before) a specified date. . The Expiration Date is the last date on which the option may be exercised; after that it carries no rights. . An American Option is a contract that allows the holder to buy or sell an asset on or before the Expiration Date. . A European Option is a contract that allows the holder to buy or sell an asset only on the Expiration Date. . Exercise or Strike Price is the price at which the holder of an option can buy or sell the asset. . A Warrant is a call option issued by a company with respect to its own securities.
