The strike cost may be set by referral to the spot rate (market value) of the hidden security or product on the day a choice is taken out, or it may be fixed at a discount or at a premium. The seller has the matching obligation to fulfill the transaction (i.An option that communicates to the owner the right to purchase a specific rate is described as a call; a choice that communicates the right of the owner to sell at a particular rate is referred to as a put. The seller might grant a choice to a buyer as part of another transaction, such as a share concern or as part of a staff member incentive scheme, otherwise a purchaser would pay a premium to the seller for the choice.
