The option market is always dominated by the writers, either the call writers or the put writers.
Understanding Writing an Option
Traders write an option by creating a new option contract that sells someone the right to buy or sell a stock at a specific price (strike price) on a specific date (expiration date). In other words, the writer of the option can be forced to buy or sell a stock at the strike price.
However, for that risk, the option writer receives a premium that the buyer of the option pays. The premium received when writing an option depends upon several factors, including the current price of the stock, when the option expires, and other factors such as the underlying asset’s volatility.
Benefits of Writing an Option
1.Some of the main benefits of writing an option include:
2.Premium received immediately: Options writers receive a premium as soon as they sell an option contract.
3.Options decline in value due to time decay, which reduces the option writer's risk and liability. Because the writer sold the option for a higher price and has already received a premium, they can buy it back for a lower price.
Call Writers vs Put Writers : who is powerful ?
During Intraday, we see the option chain and convert it's data into graph/bar charts, so that we can interpreted the data easily.
How to interpreted the graph ?
If the green line is above the red line: it means Call writers are greater than Put writers. Bearish Market
If the red line is above the green line: it means Put writers are greater than Call writers .Bullish Market
Understanding Writing an Option
Traders write an option by creating a new option contract that sells someone the right to buy or sell a stock at a specific price (strike price) on a specific date (expiration date). In other words, the writer of the option can be forced to buy or sell a stock at the strike price.
However, for that risk, the option writer receives a premium that the buyer of the option pays. The premium received when writing an option depends upon several factors, including the current price of the stock, when the option expires, and other factors such as the underlying asset’s volatility.
Benefits of Writing an Option
1.Some of the main benefits of writing an option include:
2.Premium received immediately: Options writers receive a premium as soon as they sell an option contract.
3.Options decline in value due to time decay, which reduces the option writer's risk and liability. Because the writer sold the option for a higher price and has already received a premium, they can buy it back for a lower price.
Call Writers vs Put Writers : who is powerful ?
During Intraday, we see the option chain and convert it's data into graph/bar charts, so that we can interpreted the data easily.
How to interpreted the graph ?
If the green line is above the red line: it means Call writers are greater than Put writers. Bearish Market
If the red line is above the green line: it means Put writers are greater than Call writers .Bullish Market