writer

Writer

The seller of an option who collects the premium payment from the buyer.

Notes:

For example, a writer holds a short position on a call option. If the call option is exercised, then the writer has to sell the underlying stock at the strike price of the option. Conversely, if you are the writer of a put option, you are said to be long, and must purchase the underlying stock at the particular price.

Being a writer is relatively risky - especially on a naked position. This technique should not be used by those who are new to option markets.

See also: Call, Naked Option, Option, Premium, Put, Short, Strike Price

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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.

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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.