Selling Options Vs Buying Options -

Buying an option (a call if you're bullish or a put if you're bearish) gives you the , but not the obligation, to trade a stock at a fixed price.

: Your risk is strictly capped at the premium you paid . Even if the stock crashes to zero, you can't lose more than your initial investment. selling options vs buying options

At its simplest, buying an option is like purchasing a lottery ticket with a better shot at winning, while selling an option is like acting as the casino . Buyers pay a premium for the chance at a huge payout, whereas sellers collect that premium upfront and hope nothing exciting happens. Buying Options (Long Premium) Buying an option (a call if you're bullish