stock option

A stock option is a way for a company to give its employees the ability to purchase company stock at a certain price, usually lower than what it's worth on the market. This gives the employee the potential to make money if the stock increases in value over time. For example, if a company gives an employee the option to buy their stock for $10 per share, and the stock goes up to $50 per share in the next year, the employee can purchase the stock for $10 per share and sell it for $50 per share, making a $40 profit on their investment.