In an options trade, the seller of an option takes on an obligation, while the buyer purchases a right. The buyer of a call is bullish, thinking the market will move up, while the seller of a call is bearish, thinking it will go down. Conversely, the buyer of a put is bearish while the seller of a put is bullish. Opposing sentiments about the market are implicit in every options trade as traders believe the market will move in a particular direction.
As individual investors, we trade options to get a better ROC (return on capital), to give ourselves better odds of success, to define our risk, and to combine options into profitable trading strategies. We are also interested in trading options to become active participants in the world of finance. Options trading teaches us the language of finance and helps us to develop a financial mind.
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