Definition

Writer

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Sometimes referred to as the grantor, a writer is the seller of an option. He opens a position to accumulate a premium payment from the buyer, which gives the buyer the right to buy or sell the underlying within an agreed period of time at an agreed price. The main goal for option writers is to produce income through the collection of premiums when contracts are sold to open a position. Ideally, a writer incurs losses if, the options written are uncovered in nature.