There's a call option written for 100 shares of GM stock for $85.00 a share, prior to the third Friday of October 2017: The option writer:
A) has the option but not the requirement of selling 100 shares of GM for $85.00.
B) will sell 100 shares of GM for $85.00 on the third Friday of October 2017.
C) has the option to back out of this contract prior to the third Friday of October 2017.
D) is required to post margin.

Question

Quizplus · Accepted Answer

The option writer of a call option is required to post margin as a form of collateral to ensure they can fulfill their obligation if the option is exercised by the buyer. This is a requirement by most exchanges to manage the risk of default by the option writer.

There's a Call Option Written for 100 Shares of GM