Buying vs. Selling Options: Which Is Riskier? - Investopedia
At its simplest, buying an option is like purchasing a lottery ticket with a better shot at winning, while selling an option is like acting as the casino . Buyers pay a premium for the chance at a huge payout, whereas sellers collect that premium upfront and hope nothing exciting happens. Buying Options (Long Premium) selling options vs buying options
: Generally lower (less than 50%) . For a buyer to win, the stock must move significantly and quickly in the right direction to overcome the cost of the premium and time decay. Buying vs
: Theoretically unlimited for call buyers, as there’s no ceiling on how high a stock price can go. Buyers pay a premium for the chance at
: Your risk is strictly capped at the premium you paid . Even if the stock crashes to zero, you can't lose more than your initial investment.