Hello People!
I have started learning about options trading and understand some of it.
I learnt is there are Options Buyers and Option Sellers.
Question
Option Selling Indices. Not stocks.
Are Options Sellers tagged with Options Buyers by Exchange or both work in Silos and activity happens independently?
Sorry If my Question is not clear.
It need not be the same buyer, it can be anyone willing to take the opposite side.
Suppose you sold an option and I bought it. Now after some time if you have to square off, it doesn’t mean I have to buy it.
Anyone can buy it
Thank you. So, what you mean is, if a Option Seller x is squaring off, another Option Seller y is taking that position squared off…?
For hypothetical reason, if there is are no valid option seller y available to take the option seller X’s place, then in that case, I will not be able to square off but will have continue to be in that position?
Do not overcomplicate. Buyer and Seller funda in Options is the same as in stocks, cars or a bag of potatoes.
Say you buy a car from a seller. Later on when you want to sell your car, you can sell to any buyer. If there is no buyer, you cant sell. Kind of obvious now I hope
Every transaction happening on the stock market or let say, on the Planet Earth has a buyer at one end and seller at another end.
For every stock purchased, there is a seller on the other hand (be it promoter or a general public who has the shares in their demat account)
Similarly, for every options purchased, there’s an options writer on the other side OR a person who had previously purchased the options from the another options writer.