Three Things to Consider For Start-up Stock Options - The Business Insider - 13 May 2011

Stock options - The Business Insider

The financial term “derivative“ refers
to a security whose value is a function of another security such as a
stock or bond. The most common types of derivatives are futures – the obligation to buy a security at a future date at pre-agreed upon price – and options – the right to buy something at a future date at pre-agreed upon price.

In theory, the primary societal purpose of derivates is for

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