The strike cost might be set by referral to the spot price (market value) of the underlying security or product on the day an option is gotten, or it might be fixed at a discount rate or at a premium. The seller has the corresponding obligation to fulfill the deal (i.A choice that conveys to the owner the right to purchase a particular price is referred to as a call; an alternative that conveys the right of the owner to sell at a specific rate is referred to as a put. The seller may give an option to a purchaser as part of another transaction, such as a share issue or as part of an employee incentive plan, otherwise a buyer would pay a premium to the seller for the alternative.