Call option deed

Sale contracts and option agreements each have their limitations and you should always seek advice before entering into an arrangement concerning real property. We have extensive experience in this area. Skip to content Property Development. What are the Different Options? Put Option — this is where the seller has the right to compel a buyer to buy the Property.

Call Option — this is where the buyer has the right to compel a seller to sell the Property. Put and Call Option — this may grant both parties the right to compel the other to buy or sell the Property. Usually these options would run consecutively — the call option first, and then the put option kicks in after the first option has expired. How does it work? An Option Agreement usually contains two main parts: The body of the Option Agreement, which outlines the terms on which the parties may exercise their option; and The sale contract as an annexure to the Option Agreement.

The Contract will often have all details and terms finalised, including the Purchase Price and length of contract. On exercising an option, both parties will need to sign the agreed sale contract. Option Fees and Deposits The purposes and type of Option Agreement will determine what is a reasonable basis for requiring option fees or deposits to be paid.

For example, an Option Agreement may provide that: The commercial basis for having a Call Option Fee is that the Seller is taking the property off the market for 6 months, without being guaranteed a sale. Triggers for Options Option Agreements may have set time frames during which a party may exercise its option, or otherwise the option periods can be triggered by certain events for example, the Buyer obtaining a development approval.

Nominees Option Agreements can also allow for the asset to be sold to another party on exercise of the option. Why use Option Agreements? Adjustment to Call Option: When a call option is in-the-money i. Some of them are as follows:. Similarly if the buyer is making loss on his position i.

Trading options involves a constant monitoring of the option value, which is affected by the following factors:. Moreover, the dependence of the option value to price, volatility and time is not linear — which makes the analysis even more complex. From Wikipedia, the free encyclopedia. This article is about financial options. For call options in general, see Option law. This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources.

Unsourced material may be challenged and removed. October Learn how and when to remove this template message. Upper Saddle River, New Jersey A Practical Guide for Managers.