In the film industry, an option agreement is a contract that "rents" the rights to a source material to a potential film producer. It grants the film producer the exclusive option to purchase rights to the source material if they live up to the terms of the contract and make a film (or series) from it. This is known as optioning the source material.

Some examples of producers are film studios, production companies or an individual. Source materials are often a book, theatrical play, or screenplay; however, they may also be articles, video games, songs, or any other work of intellectual property.

The term is often used as a verb. For example, "Paramount optioned a short story by Ted Chiang."

When a work is optioned, the producer has not actually purchased the right to use the source material; they have simply purchased the option to purchase the rights to the work at some point in the future, if they are successful in setting up a deal to actually film a movie (or series) based on it.

Purchasing the actual rights to a work is called "exercising" the option. This requires another contract, the "Rights Purchase Agreement".

Option agreements detail the rights of the producer and the original author, including how long the agreement lasts, the fees paid to the author, and any plans for rights associated with derivative works (for example, a future prequel to a book). The producer usually has to outline their plan for financing, writing, casting, and shooting the film or series.

Financially, the contract qualifies as a financial option and may be valued by applying real options analysis.

Film option agreements last for a set amount of time, which is called the "option period" and is often around eighteen months.