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Refers to the option writer's (seller's) obligation to sell or buy a stock or other financial instrument at the strike price for which the writer sold the contract.

The buyer of an option has the right (but not the obligation) to exercise the option - that is, buy the underlying asset at the strike price of the contract (long call) or sell (deliver) the underlying asset to the option writer at the strike price of the contract (long put).

Assignment means the options writer receives an exercise notice by another options writer that requires him to sell (in the case of a call) or purchase (in the case of a put) the underlying security at the specified strike price.

Related Terms:

An option is a type of derivative - its value is derived from an underlying asset, ...

Strike Price
A price at which the stock or commodity underlying a call or put option can be ...

Out of the Money
Refers to an options contract that has no intrinsic value; for instance, a call option whose ...

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