Option buyer

Option buyer: is the one who buys the right to exercise his option on the seller/writer. He’s often referred to as the option taker (holder), pays the option premium. In case of call options a taker pays premium and gets the right to buy shares whereas buying put options he pays premium to obtain the right to sell shares.

The ability to exercise the contract occurs when someone becomes a taker. It’s important to note, that there are 2 parties in the option contract and each option buyer corresponds to the option seller. Thus, buyers can exercise their obligations on the seller only to the extent determined by the particular option contract specificity.

Suppose, someone decides to buy the option with strike at $90 for the premium of $20. This sum is paid to the option seller to enable the buyer to become the owner of the contract. After these actions he, being the option taker, may exercise it on the seller under option features. If it comes to the call this right can be exercised beyond the price of $110.

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