Writer

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Writer

The seller of an option, usually an individual, bank, or company that issues the option and consequently has the obligation to sell the asset (if a call) or to buy the asset (if a put) on which the option is written if the option buyer exercises the option.

Option Writer

One who originally sells an option contract. In exchange for the premium, the option writer takes on an obligation to buy or sell (depending on the type of option) the underlying asset at the discretion of the option holder. For example, in a call, the option writer must sell the underlying asset to the option holder if the holder decides to exercise the option. If the option writer does not already have a long position in the underlying asset, he/she must obtain one so as to sell the position and fulfill the contract.

writer

The person who creates an option by selling an option contract in an opening transaction. An investor may be the writer of a call or a put. See also naked writer.

Writer.

In the options market, a writer is someone who sells put or call options, an activity known as writing a call or writing a put.

Unlike the buyer, or holder, of an option, who can exercise an option or let it expire, as the writer you must meet the terms of the contract if the option is exercised and assigned to you.

You collect a premium for selling the option, which may provide a profit if the option expires worthless, and you always have the right, before exercise, to buy an offsetting contract and end your obligation to buy or sell.

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