Which of the following statements is correct?
A) Option buyers have rights; option sellers have obligations.
B) Option sellers have rights; option buyers have obligations.
C) Option buyers and sellers have obligations but not rights.
D) Options buyers and sellers each have both rights and obligations.

Question

Quizplus · Accepted Answer

Option buyers have the right, but not the obligation, to exercise the option contract. Option sellers have the obligation, but not the right, to fulfill the terms of the option contract if the buyer decides to exercise their right. Therefore, option buyers have rights and option sellers have obligations.

Which of the Following Statements Is Correct