Kotak Mahindra Bank Limited
Education

Part 4 Learn Institutional Trading

13
Option Buyer vs. Option Seller

There are two sides to every option trade:

Option Buyer (Holder)

Pays premium

Limited loss

Unlimited profit potential

Needs strong directional movement

Time decay works against them

Option Seller (Writer)

Receives premium

Limited profit (premium only)

Large potential risk

Benefits from sideways/slow markets

Time decay works in favor

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