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Option contract

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Option contract

  • This topic has 1 reply, 2 voices, and was last updated 11 months ago by John Moffat.
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  • July 14, 2021 at 5:17 pm #627736
    Christie9693
    • Topics: 17
    • Replies: 7
    • ☆

    How do we differentiate the holder and writer of the option contract?

    July 15, 2021 at 7:06 am #627798
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 49602
    • ☆☆☆☆☆

    The holder is the person who bought the option and therefore has the right to exercise it if they want to.

    The writer is the person who sold the option and has to pay out if the holder decides to exercise it.

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