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    Options - Buyers and Writers

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    Please help with the following discussion regarding options for buyers and writers.

    Discuss the upside and the downside potential of options from both the perspective of the writer of the option and the buyer of the option. How and why are these the same or different?

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    https://brainmass.com/business/finance/options-buyers-writers-597539

    Solution Preview

    Questions: Discuss the upside and the downside potential of options from both the perspective of the writer of the option and the buyer of the option. How and why are these the same or different?

    An option is a contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specific price on or before a certain date.

    There are four types of participants in options markets depending on the position they take:
    1. Buyers of calls
    2. Sellers of calls
    3. Buyers of puts
    4. ...

    Solution Summary

    The solution defines options and the also explains the different players in the option markets. It then explains why buyers buy options and why writers sell options. Over 340+ words are provided in the explanation.

    $2.19