Chapter 02 · Section 2.1
Short SF Calls-1
Lara is short 2 March 53 PHLX Swiss Franc calls.
Lara has an obligation:
a) to sell Sfr 125,000 at $.53/Sfr before March.
b) to sell Sfr 125,000 at $.53/Sfr before March.
c) to buy Sfr 125,000 at $.53/Sfr if assigned between now and the expiration date in March.
d) to sell Sfr 125,000 at $.53/Sfr if assigned between now and the expiration date in March.
The fact that Lara is short means that she is a net writer or writer of calls.
A PHLX Swiss franc option may be exercised at any time until expiration. (We call that an "American option" as opposed to a "European option" which can only be exercised during a specific period just before expiration.)