How Does the Exercise of This ITM Call Option Impact the Option Seller?
The seller (writer) of the ITM Call option is obligated to sell the underlying asset (Bitcoin) to the buyer at the strike price ($42,000). Since the market price is $45,000, the seller incurs a loss of $3,000 per contract (plus or minus the premium received).
If the seller was "naked" (did not own the BTC), they must buy BTC at the market price and sell it at the strike price, realizing the loss.
