Option, also known as option, is a derivative financial instrument based on futures. In essence, the option is to price the rights and obligations in the financial field separately, so that the transferee of the right can exercise his rights on whether to trade or not within a specified time, and the obligor must perform it.

Stock option incentive (stock option incentive)

Option incentive is a typical model of equity incentive, which refers to the phenomenon of low salary and insufficient incentive for senior managers of the company. In order to better motivate operators, reduce agency costs and improve governance structure, it is an attempt to plan stock options within the company.

Option incentives are mainly awarded to the company's senior managers, who play an important role in the company. They control the daily decision-making and operation of the company, so they are the focus of incentives. In addition, the technical backbone is also the main object of encouragement.

For example, a certain number of stock options are granted to executives, who can buy company shares at a pre-agreed price. Obviously, when the company's stock price is higher than the price specified in the grant option, the executives can exercise the option to buy the stock and make a profit by buying it at the specified price and selling it at the market price. In this way, executives will have the motivation to improve the intrinsic value of the company, thus increasing the company's share price and benefiting from it.

Foreigners have no right to get option incentives in the A-share market.