Sir,
Kindly clarify my doubt. Under what scenarios and ways, can an option writer earn profit before expiration?
Kindly respond by quoting an example
Thank you
M.G
Option Writer earns profit when price of Option decreases. Your profit is limited to premium you receive as Option prices can only go to 0, while if markets go against you, losses can be undefined as there is no upside to how much prices can rise.
For detailed information on how Options work, would suggest you to read this module on Varsity.
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