On 01-01-12 A agrees to sell B 100 shares of Z corp. stock on or before January 31. On 01-01-12, the fair market value of the stock is $90 per share. The agreement calls for A to sell to B the stock for $100 per share. A has the right, but not the obligation, to sell the stock to B. A paid $2.00 premium per share covered by this agreement. If A tries to sell the stock to B on January 20 when the stock is trading for $110 per share: B is the holder and must comply A must wait until day 30 A can do that, but he would not be “in the money” A can do that, and would do it because he would be in the money