{"id":35838,"date":"2015-06-27T12:35:47","date_gmt":"2015-06-27T12:35:47","guid":{"rendered":"http:\/\/vskills.in\/certification\/blog\/?p=35838"},"modified":"2024-04-03T13:20:25","modified_gmt":"2024-04-03T07:50:25","slug":"understanding-the-market-participants-the-call-buyer","status":"publish","type":"post","link":"https:\/\/www.vskills.in\/certification\/blog\/understanding-the-market-participants-the-call-buyer\/","title":{"rendered":"Understanding the Market Participants- The Call Buyer"},"content":{"rendered":"<p style=\"text-align: center\"><a ref=\"magnificPopup\" href=\"http:\/\/vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/06\/Understanding-the-Market-Participants-The-Call-Buyer.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-35896\" src=\"http:\/\/vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/06\/Understanding-the-Market-Participants-The-Call-Buyer-300x206.png\" alt=\"Understanding the Market Participants- The Call Buyer\" width=\"300\" height=\"206\" srcset=\"https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/06\/Understanding-the-Market-Participants-The-Call-Buyer-300x206.png 300w, https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/06\/Understanding-the-Market-Participants-The-Call-Buyer.png 562w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p>In the last discussion, we tried to understand the Options market from the point of view of the Call writer, and this time around, we shall step into the shoes of the call buyer.<br \/>\nAs a market participant who is bullish, I can always buy the call, sell the put, purchase the underlying\/futures, etc., but I choose to purchase the call option. Why is it so? What is so attractive that about this instrument that I\u2019d choose it over all others? Well, we\u2019ll just discuss them.<br \/>\nSuppose I decide to buy the security, but then what if the market were to go down? Would I just not roll downhill with the market? And the same can be said of futures. So, I make up my mind to not buy the underlying\/future. If I now focus on put options, I could always write them in the anticipation that the market would go up and they would go unexercised, so why not? The reason is that if I were to judge the market wrongly, the potential for loss would be unlimited. Of course I can always square off, but why begin a trade I\u2019m not sure of?<br \/>\nSo I think I\u2019ll purchase a call option- I know that I have to pay an upfront fee, but the fee is quite minimal in the way that if I were to be proved wrong, I can always come off with the loss of the premium only. Clean, huh?<br \/>\nHere, we have seen the market from the perspective of the call buyer, but we\u2019ll soon realize that the market, for it involves such huge amounts of money, isn\u2019t always content with this amount of risk too, and that people are always trying to develop strategies to incur the least cost and come out with a assured profit. We\u2019ll learn about them when we talk about spreads and strategies in our future discussions.<\/p>\n<p><a href=\"http:\/\/www.vskills.in\/certification\/accounting-banking-and-finance\">Click here for government certification in Accounting, Banking &amp; Finance<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In the last discussion, we tried to understand the Options market from the point of view of the Call writer, and this time around, we shall step into the shoes of the call buyer. As a market participant who is bullish, I can always buy the call, sell the put, purchase the underlying\/futures, etc., but&#8230;<\/p>\n","protected":false},"author":1109,"featured_media":35896,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_joinchat":[],"footnotes":""},"categories":[1519],"tags":[2044,1037,2718,1760,1124],"class_list":["post-35838","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting-banking-and-finance","tag-derivatives","tag-finance","tag-options","tag-stock-markets","tag-stocks"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Understanding the Market Participants- The Call Buyer - Vskills Blog<\/title>\n<meta name=\"description\" content=\"Learn Understanding the Rationale behind the decision of purchasing the call option. Apply for a Vskills certification in Accounting. Click here.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vskills.in\/certification\/blog\/understanding-the-market-participants-the-call-buyer\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Understanding the Market Participants- The Call Buyer - Vskills Blog\" \/>\n<meta property=\"og:description\" content=\"Learn Understanding the Rationale behind the decision of purchasing the call option. Apply for a Vskills certification in Accounting. 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