# Option Seller Obligations ⎊ Area ⎊ Resource 2

---

## What is the Obligation of Option Seller Obligations?

The option seller undertakes a specific obligation to fulfill the terms of the contract if the buyer chooses to exercise their right. For a call option, the seller must deliver the underlying asset at the strike price, regardless of how high the market price rises. For a put option, the seller must purchase the underlying asset at the strike price, regardless of how low the market price falls.

## What is the Risk of Option Seller Obligations?

Selling options exposes the seller to potentially unlimited risk, particularly with uncovered call options. The premium received represents the maximum potential profit, while the potential loss can theoretically exceed the initial collateral. This risk profile necessitates sophisticated risk management techniques and careful monitoring of market volatility.

## What is the Collateralization of Option Seller Obligations?

To mitigate the risk of default, option sellers are typically required to post collateral or margin. This collateral ensures that the seller can meet their obligations if the option is exercised. The amount of collateral required is calculated based on the potential loss exposure and is continuously adjusted based on market movements.


---

## [Option Vault Security](https://term.greeks.live/term/option-vault-security/)

## [Option Exercise Verification](https://term.greeks.live/term/option-exercise-verification/)

## [Option Position Delta](https://term.greeks.live/term/option-position-delta/)

## [Option Pricing Privacy](https://term.greeks.live/term/option-pricing-privacy/)

## [Option Greeks Calculation Efficiency](https://term.greeks.live/term/option-greeks-calculation-efficiency/)

## [Gas Option Contracts](https://term.greeks.live/term/gas-option-contracts/)

## [Option Delta Gamma Exposure](https://term.greeks.live/term/option-delta-gamma-exposure/)

## [Option Greeks Delta Gamma Vega Theta](https://term.greeks.live/term/option-greeks-delta-gamma-vega-theta/)

## [Zero-Knowledge Option Position Hiding](https://term.greeks.live/term/zero-knowledge-option-position-hiding/)

## [Zero-Knowledge Option Primitives](https://term.greeks.live/term/zero-knowledge-option-primitives/)

---

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---

**Original URL:** https://term.greeks.live/area/option-seller-obligations/resource/2/