Comment on Basics on Options Shorting/Writing

Shailesh commented on 18 Jun 2015, 09:20 AM

Hi Nithin,
I have a query on options buying and selling. If I buy a CE (or a PE) and sell it after a profit, is my transaction over? I am asking this because as a seller of an option, I have an obligation to sell the underlying security to the buyer if he chooses so.
Does that mean that I may have to arrange for it at a later date?

Or am I not obligated for anything because I just ‘sold’ and option and didn’t ‘write’ it? In that case, who sells the security to the buyer of the CE?

Please clarify.

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