That if you had a large sum of capital (1mil+) you could trade certain option strategies with pretty much 0 risk and could make a decent amount (10-20%+ a year) on that 1mil? I know nothing about options. A friend told me he about this, he dont know much but I figured I would ask about this as I dont think it is possible. If anyone can chirp in, I would appreciate it.
Many people have $1m+ in their accounts, and no, they haven't found any "zero risk" methodology to generate 10-20% returns. Any return in excess of treasury bill returns has a risk attached to it. Your friend maybe alluded to selling naked index puts, a strategy that can very well generate 10% a year with seemingly little risk. But it's not zero risk. In fact there is always a risk of losing your entire account overnight with this type of strategy.
With a "larger account", you can get involved with complex strategies than an undercapitalized trader can't participate in. There's no guaranty of profit but the risk profile can be more attractive.
the only way to consistently make money in option markets is to short(underwrite) them. 90% of option buyers have their contracts expire worthless.
Please, let's not go down this road again! This topic has been beaten to death here on ET, and no, it's not true! Unless your friend was referring to arbitrage, there's no way to make riskless profit, and even arbitrage is not possible unless you are down on the floor.