The price that the writer of a put option receives to sell the option is called the
A) premium.
B) exercise price.
C) execution price.
D) acquisition price.
E) strike price.

Question

Quizplus · Accepted Answer

The price received by the writer (seller) of a put option (or any option) for selling the option is known as the premium. This is the income the seller earns for taking on the obligation to buy (in the case of a put) or sell (in the case of a call) the underlying asset if the option is exercised by the buyer.

The Price That the Writer of a Put Option Receives