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The exchange will guarantee both side of the contract that is HOLDER AND WRITER. if the...

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Finance

The exchange will guarantee both side of the contractthat is HOLDER AND WRITER. if the WRITER defaults, the buyer willstill be able to fulfill the transaction. of course the guaranteeto the WRITER is useless...... WHY?

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The option lies with the holder or buyer of the option The option holder or buyer needs the guarantee that if he she exercises the option the delivery is made to him Its the option holder who is at risk whether the option seller will honor the    See Answer
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