The writer (seller) of a regular exchange-listed put-option on the stock:
A) has the right to buy 100 shares of the underlying stock at the exercise price
B) has the right to sell 100 shares of the underlying stock at the exercise price
C) has the obligation to buy 100 shares of the underlying stock at the exercise price
D) has the obligation to sell 100 shares of the underlying stock at the exercise price

Question

Quizplus · Accepted Answer

The writer (seller) of a put option has the obligation to buy 100 shares of the underlying stock at the exercise price if the option is exercised by the buyer.

The Writer (Seller) of a Regular Exchange-Listed Put-Option on the Stock