Grantor

Filed Under » ,
Dictionary Says

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 Says

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.

Articles Of Interest

  1.

    Tax-Efficient Wealth Transfer

    Taxpayers with large taxable estates were required to take steps to reduce them before 2011.

  2. Options Basics Tutorial

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

  3. Why You Should Draft A Will

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

  4. Encouraging Good Habits With An Incentive Trust

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

  5. Establishing A Revocable Living Trust

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

  6. Estate Planning Basics

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

  7. 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. How Interest Rates Affect The Housing Market

    Understand how rate changes can affect home prices, and learn how you can keep up.

  9. Basic Investment Objectives

    You might know about different asset types, but do you know how each type contributes to a particular goal?

  10. Exploring The Current Account In The Balance Of Payments

    Learn how a country's current account balance reflects the country's economic health.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Xenocurrency

    A currency that trades in markets outside of its domestic borders.

  2. Wanton Disregard

    A standard of severe negligence. Wanton disregard is a very serious accusation that indicates that a person behaved extremely recklessly.

  3. Ultra ETF

    A class of exchange-traded funds (ETF) that employs leverage in an effort to achieve double the return of a set benchmark.

  4. Toehold Purchase

    A purchase of less than 5% of a target company's outstanding stockmade by an acquiring company. A toehold purchase of just under 5%, while not a significant stake in a firm, allows the shareholders a "toe-holds" grip on the company and its decision making.

  5. Samurai Bond

    A yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.

  6. Chartalism

    A non-mainstream theory of money that emphasizes the impact of government policies and activities on the value of money.
Trading Center