Which of the following is true of options?
A) The writer decides whether the option will be exercised.
B) The writer pays the buyer the option premium.
C) The buyer decides if the option will be exercised.
D) More than one of these.

Question

Quizplus · Accepted Answer

Options give the buyer the right, but not the obligation, to buy or sell a security at a specified price within a specified period of time. The buyer has the decision-making power on whether to exercise the option or not. The writer of the option receives the option premium, but does not have the power to decide whether the option will be exercised.

Which of the Following Is True of Options