There are plenty of videos about Options selling as one of the safest ways to make consistent money from the stock market. The question is, is it true and can everyone do it? In this post, I will share everything that you need to know and understand before you even think about option selling and how to make it profitable for you.
What is Option Selling?
Option Selling means that rather than buying options, you choose to only sell options as your trading strategy. For example, if you expect the market or index to go up in the near term, then rather than buying call options (like most retail traders do), you choose to sell put options.
Why Option Selling is the better way to make consistent money
Trading is a game of probability. When you trade on your trading system, there is always a probability of your trading going in profit or loss. So, when you working on your trading system, you are increasing your probability of being profitable.
When you buy an Option, you get your profit only when the momentum of the market is in your favor. Whereas, your option will lose value if the market is at the same level or it goes against you. This means the probability of success is 33% when you are an option buyer.
Whereas, Options Selling has a higher probability. Because you are profitable in two out of three scenarios.
