### Question
How is the term option defined?


### Answer
The term **option** is defined in *7 U.S.C. § 1a* as the following:

> an agreement, contract, or transaction that is of the character of, or is commonly known to the trade as, an “option”, “privilege”, “indemnity”, “bid”, “offer”, “put”, “call”, “advance guaranty”, or “decline guaranty”

#### Citation:
  - *7 U.S.C. § 1a*
  - Heading: **CHAPTER 1-COMMODITY EXCHANGES**

