If you buy out-of-the-money options at unreasonable premiums or at far away strike prices, an Options Writer will consider you to be an extremely rash trader. This is being politely.
To be blunt, he regards you as an idiot trader but nevertheless loves you, because…
AN OPTIONS WRITER MAKES HIS MONEY BY EATING PREMIUMS FROM THE OPTIONS HE WRITES (SELLS).
THE OPTIONS WRITER ALSO KNOWS THAT AT LEAST 50% OF OPTIONS EXPIRE WITHOUT BEING EXERCISED. So, if he plays it right, his chances of making profits are up at least 50% even before he starts writing.
The Options Writer is an extremely sharp trader who works with tools that constantly update him on the profit or loss potential of the option he has sold.
SECRETS OF OPTIONS WRITERS
Read more at https://bullbull.in/options/7-secrets-of-option-writers/
CAVEAT: option writers eat like chickens but go to the bathroom like elephants.
Note that earlier I was a positional option writer but have now stopped this completely. The more I read, I realised the less I knew.
To be blunt, he regards you as an idiot trader but nevertheless loves you, because…
AN OPTIONS WRITER MAKES HIS MONEY BY EATING PREMIUMS FROM THE OPTIONS HE WRITES (SELLS).
THE OPTIONS WRITER ALSO KNOWS THAT AT LEAST 50% OF OPTIONS EXPIRE WITHOUT BEING EXERCISED. So, if he plays it right, his chances of making profits are up at least 50% even before he starts writing.
The Options Writer is an extremely sharp trader who works with tools that constantly update him on the profit or loss potential of the option he has sold.
SECRETS OF OPTIONS WRITERS
Read more at https://bullbull.in/options/7-secrets-of-option-writers/
CAVEAT: option writers eat like chickens but go to the bathroom like elephants.
Note that earlier I was a positional option writer but have now stopped this completely. The more I read, I realised the less I knew.
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