I hope you already know that, options are by default gives sellers an advantage or probability of profit over buyer. It comes roughly around 65% & 35% for sellers & buyers respectively.

Depending on your skill level & the amount of time you can stay active watching markets, you should choose the role. But, there's no lakshman rekha saying that you can't cross the line between sellers & buyers. Depending on the market conditions you can switch between selling & buying. Sellers usually buy options as hedges to reduce the margin requirement.

An option buyer needs to spend a lot of time waiting, during the day for right opportunity. If one is impatient then they might overtrade and end up in losses.

Today on 16th January, 2023. Nifty closed at 17,894.85

If one were to buy an 17,900 CE then his probability of profit is around 35%

If one were to sell an 17,900 CE then his probability of profit is around 65%

Look at the breakeven for seller & buyer.

Let's assume that both seller & buyer held the option or kept the position open till expiry.

In that case, a buyer will be profitable only, if Nifty were to cross above 18,000. But where as for seller, as long as Nifty expires below 18,000 he will not lose a penny. Even if Nifty expires at 17,999.95 where the market has already moved more than 100 points against the seller. And the buyer will not profitable or he might even incur a small loss because of the other variables included in a option price, despite market moving more than 100 points in his favor.

As you can see, the margin requirement for selling an option is high. So you can say that option sellers are financially more stronger or they have more resources than an option buyer. So, if they were to defend their position at times, they're capable of doing it. This is not a hard rule, but most of the times, if you see huge OI at any level, that means sellers are confident that they can defend that level. And it is not recommended for an option buyer to buy such options. But, sometimes because of unforeseen circumstances, they will or might give up their position. Because of the cost effect to defend their position.

So, IMO one must decide a role based on their capital, skill & psychological or mental strength. As far as I know, all option buyers will eventually turn into option sellers after making profits or amassing a capital enough to be a seller.

Options Trading Suggestion!