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If buyer of the call option has right to buy the stock and seller of the call option has the obligation to deliver the stock does that mean seller cannot close out his/her position before expiry?

April 26, 2017buy buyer call option deliver mean obligation right seller stock

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If buyer of the call option has right to buy the stock and seller of the call option has the obligation to deliver the stock does that mean seller cannot close out his/her position before expiry?

1 Answer

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10 Posted

That’s not correct. An option writer can close the SELL option transaction if he/she wants by squaring off. Owner/Buyer of the option need not worry about the opposite party as there will always be equal number of buyers and sellers available all the time for a given contract.