Hang Seng Index Options are contracts which are based on Hang Seng Index. It gives the holder or buyer the right, but not the obligation, to buy or sell the HSI at a predetermined price (strike or exercise price) on a given date (expiry). The writer or seller of the option, on the other hand, is obligated to sell or buy the HSI to/from the buyer at a predetermined price when the buyer exercises the option. The option buyer pays the price of the option, which is called the price, for the exercise right from the option seller. The option seller provides the right of exercise to the option buyer in return for the price.