For the obligor, when the option holder exercises the right to buy or sell the underlying securities on the last trading day, the obligor will be assigned by the exchange to fulfill the obligations of the counterparty. Since the seller has to bear the obligation at an unfavorable price, how to ensure the smooth delivery process? The usual practice is to ask the debtor to pay a deposit to prevent default. As a result, the obligor also bears the margin risk, that is, according to market changes, he may be required to increase the margin amount, and if he fails to pay on time, he may be forced to close his position.
Since selling options is obligatory and risky, why do people still want to sell options? That's because, although selling options has a great risk of loss, it also has a friend, and that is time. As long as there is not much adverse change in the market during the period from the sale of the option to the expiration date of the option, the debtor can safely collect the royalties. For example, the seller of options is like an "insurance company". He can make up for the possible "disaster" losses by selling positions for many times and collecting "premium" income.