Buyer's Option

Definition - What does Buyer's Option mean?

Buyer's option is a settlement option that allows the buyer to determine when the transaction will settle.

Testopedia explains Buyer's Option

When a trade is executed between two parties unless otherwise specified the trade will settle regular way. Regular way settlement for stocks, corporate bonds and municipal securities is trade date plus 3 business days. If the buyer of a security wants to determine when they will deliver the payment and accept delivery of of the securities they must specify that the trade be executed on a seller's option basis. This type of settlement is very rarely used and it is difficult to find a seller willing to agree to these settlement terms.

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