What term describes the seller of an option contract?

The term that describes the seller of an option contract is "writer." In the context of options trading, the "writer" is the party that creates the option and sells it to the purchaser (or holder) of the option. The writer assumes the obligation to fulfill the terms of the contract if the option is exercised by the holder.

When a writer sells an option, they collect a premium from the purchaser, which represents the price of the option. This premium is the compensation for taking on the risk associated with the obligation to sell (in the case of a call option) or buy (in the case of a put option) the underlying asset at a predetermined price within a specified timeframe.

Understanding the role of the writer is crucial in options trading as it provides insight into the dynamics of risk and reward in these financial instruments. The other terms, such as purchaser, holder, and investor, pertain to different roles and aspects of options trading but do not specifically denote the seller of an option contract.