How do stock options work?

Indeed, stock options grant an individual the right, but not the obligation, to buy or sell a company’s shares at a predetermined price, known as the strike price, within a specified time frame. When you are given stock options, you may choose to exercise them if the current market value of the shares is higher than the strike price (for call options) or lower (for put options). This can be a valuable benefit, especially if the company performs well over time. Companies often use stock options as a means to align employees' interests with those of shareholders.