In the Context of Options, What Is the Equivalent of a "Payout Scheme" for a Contract Seller? ⎊ Path

In the Context of Options, What Is the Equivalent of a “Payout Scheme” for a Contract Seller?

The equivalent of a "payout scheme" for an options contract seller (writer) is the premium they receive upfront. This premium is their guaranteed revenue for taking on the obligation and risk.

The seller's ultimate profit or loss is determined by the difference between the premium received and any loss incurred if the option is exercised against them. The risk/reward profile is inverse to the buyer's, with limited gain (the premium) and potentially unlimited loss (for a naked call).

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