But you won’t have the cash for another three months. To make this clearer, let’s use a real world analogy… Let’s say you’re shopping for an antique grandfather clock and find the perfect one at the right price: $3,000. When the buyer of a long option exercises the contract, the seller of a short option is 'assigned', and is obligated to act. An option that gives you the right to buy is called a “call,” whereas a contract that gives you the right to sell is called a 'put.' Conversely, a short option is a contract that obligates the seller to either buy or sell the underlying security at a specific price, through a specific date. There is no obligation to buy or sell in the contract, but simply the right to “exercise” the contract, if the buyer decides to do so.
Investment Management Services Overview.
