The buyer of an option pays the seller of the option

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The buyer of an option pays the seller of the option a premium on the day that the agreement is entered into. The Strike Price or the Exercise Price The pre-specified price is referred to as the strike or the exercise price. Expiration The amount of time specified in the options contract. Exercise The option buyer elects to utilize his/her right. In the case of a call option, the buyer utilizes his/her right to buy the stock. In the case of a put option, the buyer utilizes her/his right to sell the stock.
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