Glossary › option writer

Trading glossary · advanced

option writer

The person who sells a buy-or-sell ticket and must keep its promise if the buyer uses it.

The fuller meaning

The seller of an option, who collects the premium and takes on the obligation to buy or sell at the strike if exercised. Some option writers face unlimited potential losses, such as a short call when price keeps rising, so selling options for 'steady income' without a plan is a classic mistake.

option writer, also called writer.

Related words

at the money · backtest · backwardation · basis · call option · contango · data snooping · delta · edge · entry trigger