Holder and Writer


Holder and Writer

By the Call options the holder gets the right to buy shares of the underlying security at the strike price before the expiration date. If the holder exercises his right and buys the shares of the underlying security, then the writer of the call option is bonded to sell him those shares. If the holder does not exercise his right before the expiration date, then the option expires and becomes worthless.


By the Put options the holder gets the right to sell shares of the underlying security at the strike price by the expiration date. If the holder exercises his right and sells the shares of the underlying security, then the writer of the put option is bonded to buy the shares from him. If a put option holder does not exercise his right before the expiration date, then the option expires and becomes worthless.

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