Part 2 How to Draw Accurate Support and Resistance Levels

Participants in Option Trading

There are four primary participants in the options market:

Buyer of Call Option (Long Call) – Expects the price to rise.

Seller of Call Option (Short Call) – Expects the price to fall or remain flat.

Buyer of Put Option (Long Put) – Expects the price to fall.

Seller of Put Option (Short Put) – Expects the price to rise or remain flat.

Each participant has a specific risk-reward profile. Option buyers have limited risk (the premium paid) and unlimited profit potential. Option sellers, on the other hand, have limited profit (premium received) but potentially unlimited risk.