Isn't it something like 75% of options expire worthless? Why not sell 'em. Those are pretty good odds.
volitility was very high this year. extremely high at certain points. i guess i can buy it that you would get a great return if you had sold the high (i think vix was up around $40 at one point). but selling vol throughout the year would have burned you really bad. any nasty drawdowns? or were you just really good at selling peaks and buying back in troughs?
risky business. I'd much rather be long volatility. But someone has to be sellling if I want to buy... i have made $ on the short side too, but it's hard to rest easy. I've looked at hedging by buying calls at a lower strike, but it would eat profits to nearly zero...
if you want to be in the business of insurance open up an insurance firm. you are competing with well capitalized individuals who know how to hedge their positions and maximize return on capital.