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What is a Third Party Option
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An option contract is a contract in which the writer of the option grants the buyer of the option the right, but not the obligation, to purchase from (call option), or sell to (put option), the writer, a designated security (the underlying security), at a specified price (the exercise price) within a specified time period.
Options can be settled by physical delivery of the underlying or by cash payment, depending on the contract specifications (exchange-traded option) or the terms of the agreement (over-the-counter option or OTC option, including private option).
One option contract could cover various underlying securities.
Note: SEDI requires that the number of contracts and the equivalent number of underlying securities be reported. The equivalent number of underlying securities should not be added to the actual holdings of the insider in the underlying securities as it does not mean and should not be taken to indicate that the underlying securities have, in fact, been acquired or disposed of by the insider.
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