The call option premium that is received by a call seller (writer). It represents the compensation a call seller receives against conferring on a call buyer the right to exercise on some underlying asset or variable. In other words, it refers to the call premium from the call seller’s perspective. For example, the right to exercise on a certain call option may cost $5. The seller will receive this amount as a short call premium from the buyer (who pays it as a long call premium).
August 20, 2024
