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Under the Regulations Governing the Index Options; only the Institutions, TREC Holding Members of PSX and Non-Broker Clearing Member of the NCCPL that are meeting the conditions set in the eligibility criteria are eligible to become Option Writers for which the main idea is to ensure that the Writer of Option Contracts has sound financial and technical standing to qualify for this mode of trade.
nonrefundable payment to the option writer to compensate for the
If an option writer is bullish, he can write a call covered or write a put naked.
Similarly, in the second state of the world, the option expires worthless and the option writer sells the 1/2 share of stock for $4, pays the loan off with $3.
Option writers command more premium for taking that risk, but the proportional price increase in premium is far larger the nearer the option is to expiration.
Purchasers of options pay an amount, known as a premium, to the option writer in exchange for the right under the option contract.
This tutorial presents the market conditions under which it is profitable to exercise an option and the payoffs to both the option buyer and option writer at the time of the option being exercised.
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The lead CatEPut option writer was European Reinsurance Company of Zurich, a subsidiary of Swiss Reinsurance Company.
Option writers, however, quote their prices based on the volatility of the log closing price change [[sigma].
Question--How is the premium income received by option writers taxed?
On these markets the implied volatility is directly observable through the quotes of option writers and option buyers.
In the second scenario, dynamic hedging strategies used by option writers produce selling pressures that impair market liquidity and amplify price declines, and, in the event, render the dynamic hedges ineffective.