08-21-2021, 10:27 AM
" The gamblers will pay me stupid premiums while I wait for a bottom or a market crash. I enjoy this with a small part of my port."
I think that is a very misunderstood part about options-that most expire worthless and therefore buying is bad.
1. There is no edge in selling options.
2. There is no edge in buying options.
3. Most options that are bought are done so to hedge something, not to speculate.
I know we make money selling options but that is because of the dance we do. That is the edge not the selling of premium.
Just as many would be never short a naked put-too risky but it has the same risk profile as a CC with one less commission. LOL
Options are but a tool to express one's opinion on market or volatility direction. No tool is correct for ALL situations.
Good luck to all.
I think that is a very misunderstood part about options-that most expire worthless and therefore buying is bad.
1. There is no edge in selling options.
2. There is no edge in buying options.
3. Most options that are bought are done so to hedge something, not to speculate.
I know we make money selling options but that is because of the dance we do. That is the edge not the selling of premium.
Just as many would be never short a naked put-too risky but it has the same risk profile as a CC with one less commission. LOL
Options are but a tool to express one's opinion on market or volatility direction. No tool is correct for ALL situations.
Good luck to all.