What is the meaning of "the execution of the Option" or "Option execution" in the examples below? Is it "signing"?

The Completion, as well as the execution of the Option may be carried out if on or before the Completion Date the Purchaser provides the Seller with...

The stamp duty for the Option execution shall be paid by the Purchaser.

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    more details are needed. What document are you quoting from? Jul 9, 2018 at 10:07

2 Answers 2


In general "executing" an option means doing whatever you have the option to do. For a lease with an "option" to buy - executing that option means buying the leased item (which probably means at least a signed purchase contract, perhaps not the actual transfer of funds). In employment contracts, if you have an "option" to extend the contract, executing that option means signing the extended contract. For financial options, "executing" (often called "exercising") a call option (the option to buy) means buying the underlying instrument.

So what "executing" actually means is completely contextual.


In plain English:

Option = Your right to do something, but you are not obligated to do that thing.

In Financial term usually:

Option = Price agreement between buyer and seller for the price of an underlying asset & Expiry date of this agreement.

In other words you can execute an option if you think executing an option is profitable for you.

Here are some example of day to day / finance Options and their execution:

  1. Quote from a house contractor to build a fence or patio. There could be verbiage in the quote like "This quote is valid for 30 days from the day this quote was generated".
  2. When you lease a car you usually have option to buy it at the end of the lease term. If at the end of lease you feel that price to buy the car is cheaper than buying similar car from outside and you decide to buy the car, that's an example of option execution.
  3. Stock option - Where you have option to buy underlying stocks at specified price before specific date for a small fees.

Read some basics about finance options here. Hope this helps.

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