option writer

One group would be those who sell options short, known as option writers.

This means the option writers can demand higher premiums for the former.

Thus, the option writers should earn a risk premium.

Option seller Also called the option writer, the party who grants a right to trade a security at a given price in the future.

As we all know, this is the king of the futures markets, and thus deserves the respect of the option writer.

Option Writer: The seller of either a call or put option.

In general, the option writer is a well-capitalized institution (in order to prevent the credit risk).

In an options contract, the risk to the option buyer that the option writer will not buy or sell the underlying as agreed.

The Vix being implied volatility (through options) it is in effect describing how confident option writers are.

For an option writer, he has the obligation to deliver, so he hedges it with the underlying by adjesting delta positions.

Risk to health insurance companies decreases as the number of policies increases; risk compounds for options writers as their volume increases.

The option writer (seller) may not know with certainty whether or not the option will actually be exercised or be allowed to expire.

A call option can be sold even if the option writer ("A") does not initially own the underlying stock, but is buying the stock at the same time.

It is the amount of money that the option holder pays for the rights and the option writer receives for the obligations granted by the option.

This is comparable to selling (writing) an option - the option writer gets a premium up front, but has a downside if the option is exercised.

In the final analysis, option prices (premiums) must be low enough to induce potential buyers to buy and high enough to induce potential option writers to sell.

In other words, the dear pricing of these popular puts implies that the option writer is at greater risk of having to pay out on the puts than on the calls.

Examines qualitative report writing in terms of the purposes of such reports, their content, and the rhetorical options writers need in deciding how to organise and present qualitative work.

The seller of an option contract, or option writer, has a set of possible returns which is the exact opposite of that of the buyer of the contract.

However, the effect was not dissimilar to a wash trade, if we assume that the option writer was not acting for bona fide commercial motives, but solely to support the share price.

In particular, the option writer's possible gain is restricted to the price at which he sells the option, the option premium, while his potential exposure to loss is unlimited so long as the contract remains open.

Therefore, the option writer may end up with a large, unwanted residual position in the underlying when the markets open on the next trading day after expiration, regardless of his or her best efforts to avoid such a residual.

Thus, the situation should not arise in which the writer of an option contract cannot fulfil his obligations by buying securities in the stock market, or that an investor cannot buy shares in order to sell them to the option writer.

It is more dangerous, as the option writer can later be forced to buy the stock at the then-current market price, then sell it immediately to the option owner at the low strike price (if the naked option is ever exercised).