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Grantor

• Is the party who initially sells, writes or grants an option.

 
 Embedded terms in definition
 Grants
Option
Writes
 
 Referenced Terms
 Bank guarantee letter: Is a document by which an approved bank certifies that an put option writer or Grantor has sufficient funds at the bank to cover the write. The funds are equal to the exercised value of the put. This value is equal to the strike price multiplied by the number of shares. It effectively reflects an outright purchase of the underlying security at the strike level.

 Sold call: Is a bearish strategy. It requires the Grantor of the option to fulfill the contract by accepting a short position in the underlying instrument upon exercise. The risk is unlimited and the reward is limited to the premium received.

 Sold put: Is a bullish strategy. It requires the Grantor of the option to fulfill the contract by accepting a long position in the underlying instrument upon exercise. The risk is considered unlimited, though bounded by a zero price, and the reward is limited to the premium received.

 
 Related Terms
 Grantor trust

<< Grams Grantor trust >>

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