option writer

option writer definition - finance
A person who writes, or sells, an option contract in order to earn the premium, which is the fee that the purchaser pays the writer. A writer of a call option promises to sell the underlying investment to the call purchaser, who has bought the right to purchase it at a specific price. A writer of a put option has promised to buy the underlying investment from the put buyer, who has bought the right to sell the investment at a specific price.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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