Purchase Option

A purchase option is a contractual agreement that gives a party the right, but not the obligation, to buy an asset—such as property, stock, or equipment—at a predetermined price within a specified period. This offers flexibility and potential financial advantage, allowing the holder to choose whether to proceed with the purchase based on market conditions or their needs. Purchase options are common in real estate, investing, and leasing arrangements, serving as a strategic tool to manage risk and capitalize on favorable market movements without committing immediately.