Right to purchase or sell a certain thing at a later date at an agreed cost In finance, an alternative is an agreement which communicates its owner, the holder, the right, however not the commitment, to purchase or sell an underlying possession or instrument at a specified strike price prior to or on a defined date, depending upon the form of the alternative.

Hence, they are likewise a kind of asset and have a valuation that might depend upon a complex relationship between underlying property value, time until expiration, market volatility, and other factors. Alternatives might be traded in between private parties in non-prescription (OTC) transactions, or they may be exchange-traded in live, orderly markets in type of standardized contracts.

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