Published On: Fri, Mar 29th, 2013

Option Contract

This is a type of contract that protects an investor from the seller’s ability to revoke the contract before an agreed upon time for a specified amount.

An example of such an option is an investor (an offeree) who agrees to buy a certain number of stocks at an agreed upon price by the end of the business day from a seller (offeror). The offeror of the stock gives up their ability to revoke the contract until or unless the investor imposes or revokes the option.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.