Common use of Selling Options Clause in Contracts

Selling Options. Selling an option contract generally entails considerably greater risk than buying an option contract. Although the seller receives the option premium, he may incur a loss substantially greater than that amount (possibly unlimited) if the market moves unfavorably. At the same time, in this scenario, the seller is liable for additional margin and consequential liquidation of his position if a margin call is not met within the specified time. As noted in Paragraph 6 above, if the buyer exercises the option the seller will acquire a commodity futures contract with associated liabilities and risks. European Options are only allowed to be exercised on the last day of the Option contract, such options are riskier when illiquid than American Options which are allowed to be exercised on any business day on or prior to the last trading day of the Option contract.

Selling Options. Selling an option contract generally entails considerably greater risk than buying an option contract. Although the seller receives the option premium, he may incur a loss substantially greater than that amount (possibly unlimited) if the market moves unfavorablyunfavourably. At the same time, in this scenario, the seller is liable for additional margin and consequential liquidation of his position if a margin call is not met within the specified time. As noted in Paragraph 6 above, if the buyer exercises the option the seller will acquire a commodity futures contract with associated liabilities and risks. European Options are only allowed to be exercised on the last day of the Option contract, such options are riskier when illiquid than American Options which are allowed to be exercised on any business day on or prior to the last trading day of the Option contract.

Selling Options. Selling an option contract generally entails considerably greater risk than buying an option contract. Although the seller receives the option premium, he may incur a loss substantially greater than that amount (possibly unlimited) if the market moves unfavorablyunfavourably. At the same time, in this scenario, the seller is liable for additional margin and consequential liquidation of his position if a margin call is not met within the specified time. As noted in Paragraph 6 above, if the buyer exercises the option the seller will acquire a commodity futures contract with associated liabilities and risks. European Options are only allowed to be exercised on the last day of the Option contract, such options are riskier when illiquid than American Options which are allowed to be exercised on any business day on or prior to the last trading day of the Option contractcontract .

Selling Options. Selling an option contract generally entails considerably greater risk than buying an option contract. Although the seller receives the option premium, he may incur a loss substantially greater than that amount (possibly unlimited) if the market moves unfavorablyunfavourably. At the same time, in this scenario, the seller is liable for additional margin and consequential liquidation of his position if a margin call is not met within the specified time. As noted in Paragraph 6 above, if the buyer exercises the option the seller will acquire a commodity futures contract with associated liabilities and risks. European Options are only allowed to be exercised on the last day of the Option contract, such options option are riskier when illiquid than American Options which are allowed to be exercised on any business day on or prior to the last trading day of the Option contract.