Month: July 2020

Grantor

What is a Grantor

A grantor, or writer, is the seller of either call or put options who collects the premiums for which the options are sold. Options are sold through exchanges to option holders who are responsible for the payment of the premium.

The term can also refer to the creator of a trust – the individual whose assets are put into the trust – regardless of whether the grantor also functions as the trustee.

BREAKING DOWN Grantor

Synonymous with “option writer,” a grantor creates contracts for selling options for an underlying interest or asset. For example, say a grantor has sold a call option or assumed a short position in a call option. If the call option is exercised, then the grantor has to sell the underlying stock at the strike price. Conversely, if the grantor sells a put option, the grantor is said to be long and must purchase the underlying stock at the strike price. Serving the function of an option writer is relatively risky, especially on a naked position when the writer does not actually have possession of the asset involved in the contract.

Options Contracts

Options are contracts that provide the buyer and seller the right, but not the obligation, to purchase or sell a particular asset at a specified price, referred to as the strike price, on a particular date. These contracts are supported by the presence of the underlying asset, which may be composed of a particular stock, an exchange-traded fund (ETF) or another applicable financial products.

The options writer, or grantor, has no authority as to whether the option will be exercised before the contract expires. In cases where a grantor anticipates a loss based on his position, he can choose to participate in a secondary deal with another party designed to offset the risk associated with the obligation.

Trust Creation

The grantor is the person who creates a trust, and the beneficiaries are the persons identified in the trust to receive the assets. The grantor may also be referred to as the settlor, trustmaker or trustor.

The assets in the trust are supplied by the grantor. The associated property and funds are transitioned into the ownership of the trust. The grantor may function as the trustee, allowing him to manage the property contained therein, but it is not required. If the grantor is the trustee, the trust is referred to as a grantor trust. Non-grantor trusts are still funded by the grantor, but control of the assets are relinquished, allowing the trust to function as a separate tax entity from the grantor.SPONSORED

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experience (n.)

late 14c., “observation as the source of knowledge; actual observation; an event which has affected one,” from Old French esperience “experiment, proof, experience” (13c.), from Latin experientia “a trial, proof, experiment; knowledge gained by repeated trials,” from experientem (nominative experiens) “experienced, enterprising, active, industrious,” present participle of experiri “to try, test,” from ex “out of” (see ex-) + peritus “experienced, tested,” from PIE *per-yo-, suffixed form of root *per- (3) “to try, risk.” Meaning “state of having done something and gotten handy at it” is from late 15c.

promulgate (v.)

1520s, from Latin promulgatus, past participle of promulgare “make publicly known, propose openly, publish,” perhaps altered from provulgare, from pro “forth” (see pro-) + vulgare “make public, publish.” Or the second element might be from mulgere “to milk” (see milk (n.)), used metaphorically for “cause to emerge;” “a picturesque farmers’ term used originally of squeezing the milk from the udder” [L.R. Palmer, “The Latin Language”]. Related: Promulgated; promulgating. The earlier verb in English was promulge (late 15c.).

liberty (n.)

late 14c., “free choice, freedom to do as one chooses,” also “freedom from the bondage of sin,” from Old French liberte “freedom, liberty, free will” (14c., Modern French liberté), from Latin libertatem (nominative libertas) “civil or political freedom, condition of a free man; absence of restraint; permission,” from liber “free” (see liberal (adj.)). At first of persons; of communities, “state of being free from arbitrary, despotic, or autocratic rule or control” is from late 15c.

The French notion of liberty is political equality; the English notion is personal independence. [William R. Greg, “France in January 1852” in “Miscellaneous Essays”]

Nautical sense of “leave of absence” is from 1758. Meaning “unrestrained action, conduct, or expression” (1550s) led to take liberties “go beyond the bounds of propriety” (1620s). Sense of “privileges by grant” (14c.) led to sense of “a person’s private land” (mid-15c.), within which certain special privileges may be exercised, which yielded in 18c. in both England and America a sense of “a district within a county but having its own justice of the peace,” and also “a district adjacent to a city and in some degree under its municipal jurisdiction” (as in Northern Liberties of Philadelphia). Also compare Old French libertés “local rights, laws, taxes.”

Liberty-cap is from 1803; the American Revolutionary liberty-pole, “tall flagstaff set up in honor of liberty and often surmounted by a liberty-cap” is from 1775. Liberty-cabbage was a World War I U.S. jingoistic euphemism for sauerkraut.

Aeterni regis

The papal bullAeterni regis [English: “Eternal king’s”] was issued on 21 June 1481 by Pope Sixtus IV. It confirmed the substance of the Treaty of Alcáçovas, reiterating that treaty’s confirmation of Castile in its possession of the Canary Islands and its granting to Portugal all further territorial acquisitions made by Christian powers in Africa and eastward to the Indies.

https://en.wikipedia.org/wiki/Aeterni_regis