Part 3 Trading Master Class With Experts

Types of Option Traders

Different traders use options for different purposes. Here’s how:

Speculators – Trade options to profit from short-term market moves.

Hedgers – Use options to protect their existing investments (like insurance).

Income Traders – Sell options regularly to collect premium income.

Arbitrageurs – Exploit price differences between spot and derivatives markets.

For example, a portfolio manager holding stocks may buy put options to safeguard against sudden market falls. Meanwhile, a retail trader may sell call options to earn regular premium income.