Grantor

AAA

DEFINITION of 'Grantor'

1. A seller of either call or put options who profits from the premium for which the options are sold. Synonymous with option writer.

2. The creator of a trust, meaning the individual whose assets are put into the trust.

INVESTOPEDIA EXPLAINS 'Grantor'

1. For example, say a writer has sold a call option, or assumed a short position in a call option. If the call option is exercised, then the writer has to sell the underlying stock at the strike price Conversely, if the writer sells a put option, he or she is said to be long, and must purchase the underlying stock at the strike 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.

2. The grantor is the person who creates the trust, and the beneficiaries are the persons identified in the trust to receive the assets.

RELATED TERMS
  1. Dynasty Trust

    Long-term trusts created to pass wealth from generation to generation ...
  2. Register Of Deeds

    A record of real estate deeds or other land titles that is maintained ...
  3. Call

    1. The period of time between the opening and closing of some ...
  4. Writer

    The seller of an option who collects the premium payment from ...
  5. Naked Option

    A trading position where the seller of an option contract does ...
  6. Premium

    1. The total cost of an option. 2. The difference between the ...
Related Articles
  1. Credit & Loans

    Why is my rent on my credit report?

    Find out how, when and why your rental history is included in your consumer credit report and how lenders can use that information in making credit decisions.
  2. Taxes

    Tax-Efficient Wealth Transfer

    Taxpayers with large taxable estates were required to take steps to reduce them before 2011.
  3. Options & Futures

    Options Basics Tutorial

    Discover the world of options, from primary concepts to how options work and why you might use them.
  4. Retirement

    Why You Should Draft A Will

    Don't trust the courts to follow your wishes - plan the distribution of your own assets.
  5. Insurance

    Encouraging Good Habits With An Incentive Trust

    Money can be a powerful motivator - why not use it to teach your heirs positive lessons?
  6. Retirement

    Establishing A Revocable Living Trust

    This arrangement allows you to have more control over your estate - both before and after your death.
  7. Insurance

    Futures Fundamentals

    For those who are new to futures but want a solid understanding of them, this tutorial explains what futures contracts are, how they work and why investors use them.
  8. Retirement

    Estate Planning Basics

    Deciding what will happen to your assets when you pass away is a must - no matter how wealthy you are.
  9. Options & Futures

    What are the differences between divergence and convergence?

    Find out what technical analysts mean when they talk about a market experiencing divergence or convergence and how they affect trading strategies.
  10. Options & Futures

    What are the most common momentum oscillators used in options trading?

    Read about some of the most common technical momentum oscillators that options traders use, and learn why momentum is a critical concept for options trading.

You May Also Like

Hot Definitions
  1. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  2. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  3. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  4. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  5. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
  6. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
Trading Center