Part 2 Candle Stick Pattern

Option Writers and Their Role

Every option has a buyer and a seller (writer). The seller earns the premium but carries unlimited risk if the market moves against the position.

For example, if a trader sells a NIFTY 22,000 call and the index rises to 22,500, the seller must compensate the buyer for the 500-point move. Hence, writers usually require higher margin money and risk management discipline.