The document outlines the risks faced by option writers, including the possibility of being assigned an exercise at any time for American-style options and only at specific times for European-style options. It discusses the implications of being assigned, such as the inability to close out the position once assigned and the potential financial consequences. Additionally, it highlights the opportunity cost for covered call writers who forgo potential profits from increases in the underlying asset's value.
documents/vol00010-efta01353453-pdf.pdf
{"title":"Risks of Option Writers","document_type":"other","key_organizations":["OCC"]}