Well I can tell you there were lots of option sellers who sold Puts near the 2000 mark who had a lot of anxiety when it dipped into the low 1800's probably a lot who bailed on positions.
Because an option is an inherently leveraged product. Looking at the returns compared to the option value is like looking at the returns of an ES future based on margin requirements. In your world, if you sell an option, does that mean your return is 100%?
No because in my world, the broker only allows me to do "buy-write" or covered calls. So, my return at settlement will be gain/(cost of shares - proceeds of selling call options). For you pros, the return is the negative of those on the other side of the trade: the buyer of options? i.e., in aggregate if as a buyer I lost $x, my counterpart on the sell side should gain $x, (both ignoring commissions and slippage)? If I am wrong, please correct me. Thanks.
You are telling me the grass seemed greener on the other side of the fence but is actually not. Perhaps the best position is be a market maker. But then rmorse will tell me it is not as good as it seems to be a market maker. Thanks for the comments.
HL = Higher Low IWM = ETF that mimics the Russell 2000, Trade the ETF outright or with options TF = Russell 2K SS = Short Squeeze