The difference between Option buyer & option seller, Buyer of an option has limited risk (to the extent premium paid), An Option writer has unlimited risk, An option buyer has a high reward-to-risk ratio, Option writer has a low reward-to-risk ratio, An option buyer has unlimited profit potential, Option writer has to pay margin money (exposure and span margin),
The call option provides buying rights to the buyer, but without any obligation of buying, Put option provides selling rights to the buyer without any obligation to sell, Call option buyers expect that the stock or index prices will increase, Put option buyer is determined that the stock or index prices will decrease
Option trading is a type of financial trading that allows traders to buy or sell the right to buy or sell underlying assets or sell shares at a set price within a specific time frame. A Call option is used when you expect the prices to increase/rise. A Put option is used when you expect the prices to decrease/fall.
If you do option trading, then it is very important to know about option Greeks before doing option trading, because there are four factors of option Greeks, Delta, theta, gamma, vega. When there is a change in the index or any stock, there is a change in the calls and puts of that stock or index, which is a very important role of option Greeks.