We as option sellers can be wrong with our market view and still end up making money because of the power of theta decay and adjustments to some extent.
Adjustments work better as get closer to expiry since decay is the highest.
Most of the successful traders here are option sellers.
Ever wondered why?
Why we have chosen option selling?
Find our below
We as option sellers can be wrong with our market view and still end up making money because of the power of theta decay and adjustments to some extent.
Adjustments work better as get closer to expiry since decay is the highest.
The biggest reason and one of the prime reasons is the theta decay.
Option sellers always have an advantage because the as time passes, the option premium falls even if the underlying instrument doesn't move.
Option selling also enables us to take a directional view. In fact, directional view along with theta decay makes it a solid combination.
Debit spreads and credit spreads works great for a directional view.
We can make money in option selling even if the market doesn't move as the otm options will go to 0 with the help of theta decay. It's the most fascinating thing.
This is what attracted many into option selling.
Option selling has extremely low transaction costs as compared to futures and other instruments.
The STT which has to be paid in option selling is drastically low making it an excellent option for many
Hedging is an excellent tool in option selling. It protects you from losses and also makes you more money than the original trade itself in some cases.
Hedging also makes sure you stay in the trade and prevents you from being thrown out in small spikes.
Usually naked option carries unlimited risk.
But hedging your risk ensures limited risk on your positions.
You can also deploy limited risk strategies which protects you from any big spike and also big gaps.
Option trading is all about trading volatility. Option selling can be used to take advantage of rising and falling volatility.
Adjustments is the heart of option selling.
The ability to adjust your trades and coming out in profit even when your view goes wrong is one of the prime reason why option selling is amazing.
Adjustments can be done in "n" number of ways as per one's style.
Option selling requires very low margin as compared to futures because of hedging. You can also make your option selling position behave like futures by going with itm options, although I personally don't recommend it to newbies.
In option selling,you can play ALL directions
If you're bullish you can play long, If you're bearish you can play short and if you think the market will be rangebound, you can deploy neutral strategies
The flexibility it offers is unmatched!
Close to 80% of the options expire worthless. So the probability is always on your side.
You don't have to be intelligent to make money. Only trade the most high probable setups and you're good to go.
Option selling is an amazing tool for making consistent returns and compounding your money at a decent pace with least drawdown.
You just have to make 2% a month.
Often buying options, futures, etc has a problem of scalability.
But selling options can be done at a scale! It can be done with huge capital and there's seriously no limit as to how much capital one can scale!
Option selling is not only used for trading but also for hedging your long term investment portfolio.
Covered calls is an excellent way to collect premiums from option selling as long as your stock is flat/going down and bring down the average price.
Cash secured puts is an amazing way to buy stocks at your desired price provided you have enough cash to take the delivery of the stock.
Option selling requires patience by default since it doesn't give you money instantly like other instruments.
It cultivates the habit of patience and also makes you less prone to take unnecessary risks.
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Fake chats claiming to be from the Irish African community are being disseminated by the far right in order to suggest that violence is imminent from #BLM supporters. This is straight out of the QAnon and Proud Boys playbook. Spread the word. Protest safely. #georgenkencho
There is co-ordination across the far right in Ireland now to stir both left and right in the hopes of creating a race war. Think critically! Fascists see the tragic killing of #georgenkencho, the grief of his community and pending investigation as a flashpoint for action.
Across Telegram, Twitter and Facebook disinformation is being peddled on the back of these tragic events. From false photographs to the tactics ofwhite supremacy, the far right is clumsily trying to drive hate against minority groups and figureheads.
Declan Ganley’s Burkean group and the incel wing of National Party (Gearóid Murphy, Mick O’Keeffe & Co.) as well as all the usuals are concerted in their efforts to demonstrate their white supremacist cred. The quiet parts are today being said out loud.
The best thing you can do is challenge disinformation and report posts where engagement isn’t appropriate. Many of these are blatantly racist posts designed to drive recruitment to NP and other Nationalist groups. By all means protest but stay safe.
There is co-ordination across the far right in Ireland now to stir both left and right in the hopes of creating a race war. Think critically! Fascists see the tragic killing of #georgenkencho, the grief of his community and pending investigation as a flashpoint for action.
Across Telegram, Twitter and Facebook disinformation is being peddled on the back of these tragic events. From false photographs to the tactics ofwhite supremacy, the far right is clumsily trying to drive hate against minority groups and figureheads.
Be aware, the images the #farright are sharing in the hopes of starting a race war, are not of the SPAR employee that was punched. They\u2019re older photos of a Everton fan. Be aware of the information you\u2019re sharing and that it may be false. Always #factcheck #GeorgeNkencho pic.twitter.com/4c9w4CMk5h
— antifa.drone (@antifa_drone) December 31, 2020
Declan Ganley’s Burkean group and the incel wing of National Party (Gearóid Murphy, Mick O’Keeffe & Co.) as well as all the usuals are concerted in their efforts to demonstrate their white supremacist cred. The quiet parts are today being said out loud.
There is a concerted effort in far-right Telegram groups to try and incite violence on street by targetting people for racist online abuse following the killing of George Nkencho
— Mark Malone (@soundmigration) January 1, 2021
This follows on and is part of a misinformation campaign to polarise communities at this time.
The best thing you can do is challenge disinformation and report posts where engagement isn’t appropriate. Many of these are blatantly racist posts designed to drive recruitment to NP and other Nationalist groups. By all means protest but stay safe.
