Because the price increase can be infinite, so can the loss of the option seller. The seller chooses to buy or sell assets with unlimited losses. Including stocks, national debt, currency, stock index, commodity futures and so on. Options are derived from these subject matter, so they are called derivative financial instruments.

It is worth noting that the option seller does not necessarily own the underlying assets. Options can be "short". Option buyers may not really want to buy the underlying asset. Therefore, when the option expires, both parties do not have to make physical delivery of the subject matter, but only need to make up the price according to the price difference.

Price:

When buying and selling options, there will be the price of the option, which is usually called "option fee" or "option fee". Option premium is the only variable and other elements in the option contract.

For example, the execution price, contract expiration date, transaction type, transaction amount, transaction time, trading place and other factors are all agreed and standardized in the contract in advance, while the price of options is obtained by traders bidding on the exchange.