The buyer of a call option has the right to exercise the option, but the seller...
The buyer of a call option has the right to exercise the option, but the seller (writer) of the call option has the:
answer choices
A. choice to offset with a put option upon exercise.
B. obligation to deliver the shares at the exercise price.
C. choice to deliver shares or take a cash payoff.
D. obligation to deliver a put option upon exercise.
Homework Answers
Ans B. obligation to deliver the shares at the exercise price.
The buyer of a call option has the right to exercise the option, but the seller (writer) of the call option has the obligation to deliver the shares at the exercise price. The seller of the call option has to fulfill the obligation of selling the shares at predetermined price to the buyer of the option. The seller of the option takes premium for fulfilling the obligation.
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The buyer of a call option has the right to exercise the option,
but the seller...
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