Seller

DEFINITION of 'Seller'

1. An individual or entity that exchanges any type of good or service in return for payment.

2. In the option market, the seller is the investor who collects a premium from the buyer in return for taking on the risk associated with holding a short position in an option. The seller of an option is also known as a "writer".

BREAKING DOWN 'Seller'

1. In financial markets, the seller is the investor who gives up his/her investment to the buyer in return for payment. Individual investors sell everything from equities and options to commodities and currencies - and much more. You don't have to look hard to find some sort of seller in the world of business.

2. Being the seller of an option is relatively risky when compared to other types of investment activity. For example, the writer of a call option is obligated to sell a specific number of shares of an underlying security in the event that the price heads above the strike price.

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    The incorporation of options into all types of investment strategies has quickly grown in popularity among individual investors. ... Read Full Answer >>
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