If the owner of the option exercises the right to buy or sell,the seller of the option must ________.
A) Find a broker for the buyer.
B) Set the strike price and find a new buyer.
C) Calculate the new strike price based upon the days left on the contract.
D) Buy or sell the financial instrument to the buyer.

Question

Quizplus · Accepted Answer

If the option owner exercises their right, the seller of the option must fulfill their obligation and either buy (if they sold a put option) or sell (if they sold a call option) the underlying financial instrument to the buyer at the agreed-upon price (strike price). The option seller does not need to find a broker for the buyer, set a new strike price, or recalculate the strike price based on the remaining days of the contract.

If the Owner of the Option Exercises the Right to Buy