Part 1 Master Candle Stick Pattern How Options Work
Each option represents a contract between a buyer and a seller. The buyer pays a premium to the seller (also called the writer) in exchange for certain rights:
The call option buyer has the right to buy the asset at the strike price.
The put option buyer has the right to sell the asset at the strike price.
If the market moves in favor of the buyer, they can exercise the option to make a profit. If the market moves against them, they can simply let the option expire, losing only the premium paid.
