Part 1 Support and Resistance

Option Buyers vs. Sellers

Buyers have limited risk (only the premium paid) but unlimited profit potential.

Sellers (writers) have limited profit (the premium received) but potentially unlimited loss, especially in uncovered positions.

Leverage and Capital Efficiency

Options allow traders to control large positions with a small investment. This leverage magnifies both profits and losses, making options powerful but risky tools for speculation or hedging.