Buy and Write

Buy and Write - A buy and write is an investments technique where a call option that is written, in the form of a formal contract, on a financial security or asset at the same time it is purchased. A call option is a contract, in formal form, between an option seller called the optioner, and an option buyer, called the optionee gives the optionee the chance with no obligation to buy a specific financial instrument at a specific price called an exercise price on or before the option's expiry date. Investors who purchase these options believe that the price will go up and they will be able to make a huge profit from a small investment.