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What is a grantor?

Grantor

A grantor can be an options trader or an investor who makes a premium by selling options for an underlying asset. A grantor can also refer to someone who creates a trust and places assets in the trust on behalf of a beneficiary.

Where have you heard about Grantors?

As an investor you may have seen the term 'grantor' on company documents. Otherwise it is unlikely you'll have seen the term much unless you're involved with running or a beneficiary of a trust.

What you need to know about grantors.

A grantor is seller of either call options or put options; essentially agreeing to either sell stock at a set price or buy stock at a set price.

The grantor is also called an' option writer'. Grantors also write the contracts for selling options on underlying assets. Acting at the option writer is relatively risky, as the writer is not in possession of the asset involved in the transaction.

In trusts, the grantor is the person who creates the trust and supplies the assets that are transferred into the trust's ownership. The grantor may also act as the trustee, but it is not required, and the trust is called a grantor trust. Non-grantor trusts are still funded by the grantor, but the grantor has no control of the assets.

Find out more about grantors.

To learn more about the role of a grantor, see our definitions on options and trusts.

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