Writer

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DEFINITION of 'Writer'

The seller of an option who collects the premium payment from the buyer.

INVESTOPEDIA EXPLAINS 'Writer'

For example, a writer holds a short position on a call option. If the call option is exercised, then the writer has to sell the underlying stock at the strike price of the option. Conversely, if you are the writer of a put option, you are said to be long, and must purchase the underlying stock at the particular 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.

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  2. Does the seller (the writer) of an option determine the details of the option contract?

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  3. Why would a company issue a rights offering?

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  4. What is the difference between share purchase rights and options?

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  5. What is the difference between an option-adjusted spread and a Z-spread in reference ...

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  6. In what ways can a sinking fund affect bond returns?

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