601 West 26 Corp. v. Solitron Devices, Inc.

601 W. 26 Corp. (plaintiff) engages in the business of writing calls — options by which it agrees to sell a given security at an agreed price at any time within six months. In the course of its business, plaintiff wrote calls on 32,600 shares of the common stock of Solitron Corp., an electronics corporation whose stock is traded on the American Stock Exchange at widely fluctuating prices. If the price of Solitron falls below the option price, the call will not be exercised and plaintiff will profit by the amount of the premium. If the price rises, however, the option will be picked up and…