Accounting Dictionary

Stock Option

A stock option is the right to buy or sell a share of stock if you so desire. Usually the price is specified at the time the option is granted rather than at the time of the transaction. Some common stock options are put options, call options, and employee stock options.

John has the option to buy his employer’s stock at $50 a share. If the stock goes up to $60, he will exercise the option and buy the stock at $50. He can then sell immediately and earn a profit of $10 a share. If John’s employer’s stock goes down to $30, John will not exercise his $50 stock option because, in that case, he couldn’t make any money.

Sign Up to Learn More!

Join our mailing list today to get notified of new discount offers, course updates, Roger CPA Review news, and more!

Scroll to Top
Get Your eBook Today!

Fill out this form to have our eBook sent directly to your email address.

Access Until You Pass

The Elite-Unlimited course provides UNLIMITED continuing access to your course materials until you pass the CPA Exam! How does it work? Upon activating your course, you will have an initial 36 months of access. You can then renew your subscription as many times as you need to pass your exams—for FREE. Simply click the “renew” option in your student account and you can continue studying your high-quality course materials without losing any of your data and course progress.

Renewal Instructions

  •   Please purchase a renewal using the "Renew" option from the My Account page
  •   To qualify for renewal pricing, course must be renewed before it expires
  •   All renewals are effective from the current expiration date and cannot be deferred
  •   Test information cannot be reset (deleted) with renewal unless eligibility criteria is met (see Help page)