The strike cost may be set by recommendation to the area cost (market value) of the underlying security or product on the day an option is secured, or it may be fixed at a discount rate or at a premium. The seller has the matching responsibility to satisfy the deal (i.An option that conveys to the owner the right to buy at a specific cost is described as a call; an alternative that communicates the right of the owner to offer at a particular cost is described as a put. The seller might give an alternative to a purchaser as part of another transaction, such as a share issue or as part of a worker incentive plan, otherwise a purchaser would pay a premium to the seller for the choice.
