Timeline for how derivatives transfer risk from one entity to another
Current License: CC BY-SA 3.0
4 events
| when toggle format | what | by | license | comment | |
|---|---|---|---|---|---|
| Feb 12, 2015 at 19:01 | comment | added | serakfalcon | @Rocky the writer may not care, they might prefer to know that they at least have a seller at the strike price and some cash in the form of the cost of the option if the stock drops below that. | |
| Feb 7, 2015 at 22:49 | comment | added | Rocky | The call option you bought was written by someone else who sold the option to you. Usually they own the shares already (a "covered call") and they are risking the upside of the stock increasing in value beyond the strike price. Only one of you is going to win on the option, although the writer of an executed covered call just lost out on additional gains. | |
| Feb 7, 2015 at 19:49 | vote | accept | Victor123 | ||
| Feb 7, 2015 at 19:44 | history | answered | Yosef Weiner | CC BY-SA 3.0 |