Bitcoin / TetherUS
Education

Part 1 Ride The Big Moves

55
Key Participants in Option Trading

There are two primary participants:

Option Buyer

Pays a premium to buy the option

Has limited risk (maximum loss is the premium paid)

Has potentially unlimited profit (in certain cases)

Option Seller (Writer)

Receives the premium

Has limited profit (only the premium received)

Bears higher or unlimited risk

Understanding the mindset of buyers and sellers is crucial because option prices are driven by their interaction.

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