The Power of Divergence in Trading

Participants in the Options Market

There are four main types of market participants, each with different motivations:

Buyers of Call Options: Expect the asset price to rise.

Sellers (Writers) of Call Options: Expect the asset price to remain stable or fall.

Buyers of Put Options: Expect the asset price to decline.

Sellers (Writers) of Put Options: Expect the asset price to remain stable or rise.

Each side of the trade involves a buyer and a seller, and each carries distinct risks and rewards.