Option Contract Definition | Becker
Accounting Dictionary
Option Contract
- A contract between two parties that gives one party the right, but not the obligation, to buy or sell something to the other party at a specified price (the strike price or exercise price) during a specified period of time. The option buyer, or holder, must pay a premium to the option seller, or writer, to enter into the option contract. A contract in which the offeree pays consideration to keep an offer open.