There are two types of option sales: covered and uncovered.
If you write an uncovered call option, you have an unlimited liability. If you write an uncovered put, your liability is limited since the uncerlying stock can't drop below zero.
With a covered call, you have no risk at all from the call. However if you sell a call and the stock drops $10, you will make money on the option since it would expire worthless and you would keep the money. However it more-or-less locks you in with the stock, so unless you buy back the call before it becomes worthless, you cannot sell the call unless you want to convert the covered call into an uncovered call situation.
People who buy calls hope the stock will rise a lot and their call will go up to several times its cost. Most option traders lose money unless there is a market that is going straight up or straight down.
The bottom line is that the probability is like 95% that an option sells for an implied volatility that is above the expected volatility over the period until expiration (or the realized vol over that period in the rearview mirror). It's not a totally clean argument but it says that selling options is like selling insurance and that your premiums ought to outweigh your losses on a large enough time/diversity scale.
I understand they make a premium, but their losses can be significant.
