From The Collaborative International Dictionary of English v.0.48:

Option \Op"tion\, n. [L. optio; akin to optare to choose, wish,
   optimus best, and perh. to E. apt: cf. F. option.]
   1. The power of choosing; the right of choice or election; an
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            There is an option left to the United States of
            America, whether they will be respectable and
            prosperous, or contemptible and miserable, as a
            nation.                               --Washington.
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   2. The exercise of the power of choice; choice.
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            Transplantation must proceed from the option of the
            people, else it sounds like an exile. --Bacon.
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   3. A wishing; a wish. [Obs.] --Bp. Hall.
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   4. (Ch. of Eng.) A right formerly belonging to an archbishop
      to select any one dignity or benefice in the gift of a
      suffragan bishop consecrated or confirmed by him, for
      bestowal by himself when next vacant; -- annulled by
      Parliament in 1845.
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   5. (Stock Exchange) A stipulated privilege, given to a party
      in a time contract, of demanding its fulfillment on any
      day within a specified limit; also, the contract giving
      that privelege; as, an option to buy a stock at a given
      price; to exercise an option.
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   Note: A person owning a stock may sell to another person an
         option or right to buy that stock at some specified
         price within a specified period of time, and in return
         will get a premium in consideration for giving the
         option. If the option price (the strike price) is above
         the market value for the entire period in which the
         option is valid, the option is typically not exercised,
         and expires with no need on the part of the stock owner
         to transfer the actual stock itself. If however the
         stock price rises above the option price, the holder of
         the option may exercise the option, and buy the stock
         at the specificed price, and may in turn resell the
         stock at the current market value, perhaps making a net
         profit on the transaction. The original holder of the
         stock will receive, in addition to the price at which
         the stock is sold, the price of the option, and will
         generally receive more money than if the stock itself
         were sold at the time that the option was sold. The
         actual profits for the transaction will depend on the
         fees that brokers charge for conducting the sales of
         options and stocks.

   Buyer's option, an option allowed to one who contracts to
      buy stocks at a certain future date and at a certain
      price, to demand the delivery of the stock (giving one
      day's notice) at any previous time at the market price.

   Seller's option, an option allowed to one who contracts to
      deliver stock art a certain price on a certain future
      date, to deliver it (giving one day's notice) at any
      previous time at the market price. Such options are
      privileges for which a consideration is paid.

   Local option. See under Local.
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   Syn: Choice; preference; selection.

   Usage: Option, Choice. Choice is an act of choosing;
          option often means liberty to choose, and implies
          freedom from constraint in the act of choosing.
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