A stock option granted by a target firm to a white knight in exchange for more equity or the purchase of a piece of the company is known as a lock-up option. Its goal is to deter a hostile takeover attempt, and the option holder is restricted from selling the shares to anybody other than the target company’s authorized buyers. The contractual option effectively locks up shares of the target company’s stock or other appealing assets. A lock-up defense is another name for the lock-up option. It’s been dubbed “shark repellant” in risk arbitrage.