InvestorQ : What is the right time to sell call and put options and how are the risks?
Mahima Roy made post

What is the right time to sell call and put options and how are the risks?

Answer
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Aditi Sharma answered.
2 years ago


An option seller has a negative view on the stock. The option buyer believes that the stock price will go up or go down and buys calls or puts accordingly. A call option seller believes that prices will not go above a certain level and a put option seller believes that prices will not go below a certain level. Remember, the maximum gain of the option seller is the premium received but the losses can be unlimited if the price moves in the opposite direction. That is why stop losses are critical.