Equity Option

Equity Option - an equity option which is also called a stock option is an underliner of a common stock giving the holder the right to buy or sell its stock. The option will list a specified date, and at a specified price. An Option in itself is a right but not an obligation to buy or sell a portion of a stock a debt, currency, index or commodity, during a certain timetable at a certain price. This option reduces the risk factor for the buyer in a down market where stock prices fall. If the holder (the buyer) exercises his option to buy, the seller (writer) is obligated to fulfill the holder's request.