Option Trading Advanced StrategiesA. Option Buyer
The buyer pays a premium to purchase a call or put.
Rights: Has the right, not the obligation, to exercise the option.
Risk: Limited to the premium paid.
Reward: Potentially unlimited (for calls) or large (for puts).
B. Option Seller (Writer)
The seller receives the premium upfront.
Obligation: Must fulfill the contract if the buyer exercises it.
Risk: Very high (sometimes unlimited).
Reward: Limited to premium collected.
Option sellers typically have higher probability strategies but higher margin and high risk.
