The option holder is:
A) the seller of an option.
B) another name for the clearinghouse used in futures contracts.
C) the buyer of an option.
D) always a speculator.

Question

Quizplus · Accepted Answer

The option holder refers to the person who has bought an option contract, giving them the right (but not the obligation) to buy or sell an underlying asset at a predetermined price and date. This person is also known as the option buyer. A is incorrect because the seller of an option is known as the option writer. B is incorrect because the clearinghouse is a separate entity that acts as a buyer to every seller and a seller to every buyer in futures contracts. D is incorrect because while speculators may be among option holders, it is not always the case.

The Option Holder Is