Options Writer Dilemma

sumeetsj

Well-Known Member
#11
Thanks stoch guy for explaining the concept of options writer , that is what my understanding was as well.

But, then if i am first buying a call and then selling it off then would i also not qualify as an options writer (for selling the call) and hence there is a potential to incur unlimited loss for the premium the new buyer might have.

Is my understanding correct guys or i misunderstood something?

Thanks
Option buyer will always have a limited loss, and thats the loss of premium if at all any
whereas
Option writer can have unlimited loss is there are no bounds as to where the price of a scrip may go, hence writing always involves strategies.