What is option writer?Writer
The side that sells an option and collects the premium, taking on the obligation if the buyer exercises.
Animation · option writer
Learn “option writer” in an animated lesson
- Options BasicsCall Options
Buying a call: pay a premium to lock in the right to buy at the strike. Drag the price at expiration and watch the payoff curve "bend".
- Options BasicsPut Options
Buying a put: the right to sell at the strike, like "insurance against a fall". The lower the stock goes, the more it's worth.
- Options BasicsThe Option Seller
The seller of an option gets paid up front but takes on an obligation. Compare the risks of a short call and a short put.
- Options BasicsWhat Is an Option?
Pay a small amount now for the right to buy (or sell) at an agreed price later. Think of it like a deposit on a house.
- Options: Next StepsThe Four Basic Positions
Compare long call, short call, long put and short put side by side, and tweak the payoff curves in real time.
- Options: Next StepsTime Decay (Theta)
Time value is like a melting ice cube: it shrinks every day, and melts faster the closer expiration gets.
Related terms
See how “option writer” works for yourself with an animation you can drag and play.
Go to “Call Options”