Premium Options Seller

Discussion in 'Options' started by apopilot, Nov 2, 2009.

  1. apopilot


    Over the past 4 years I have been involved in options trading. A friend of mine told me about this site and it looks like a great location to share ideas. My training included premium selling techniques. Are there other types of options trading like inventory building using volatility? Do most options traders sell premium?

  2. #sellers = #buyers
  3. lindq


    #sellers / (VIX * TC) = BA

    Where TC=Trading Capital and BA=Busted Account
  4. 1) The number of contracts bought equals the number of contracts sold.
    2) The quantity of traders/investors would hardly ever be equal on the buy-side and sell-side. :cool:
  5. the answer to your question is that most experienced individual investors sell options.

    Newbies buy options because they don't understand what they are doing.

    Don't misunderstand. selling premium does not mean selling naked options.

    By the way, the jokers who believe the number of buyers = the number of sellers don't understand your question. MOST individuals sell. Much of the buying is done by market makers and professionals who use the options to hedge their portfolios.

  6. An uninformed response. Selling options has little edge over buying. And requires a lot of capital to hold for any length of time.

    Lots of EXPERIENCED people buy options to hedge a position, or as part of a strategy, etc. Calling them newbies is bizarre for someone like you, claiming a lot of experience.

    Personally, I don't buy or sell options.
  7. apopilot


    Thank you. I mostly sell premium and hedge my positions with debit spreads such as verticals, butterflies, calenders, etc. Thank you for your response.
  8. Selling optons has no inherent edge over buying them
  9. that was the point
  10. Uninformed? Your response is ridiculous.

    1) The question was whether most investors buy or sell option premium. It has nothing to do with EDGE. It has nothing to do with anything. It was a simple question and I replied.

    2) You made up your own question, and I did not reply to your (imaginary) question. I answered the OP's question.

    3) I did not call option buyers newbies.

    I said newbies buy options.

    I did not say option buyers are newbies.

    What I will say is that you understood neither the original question nor my reply. yet you felt compelled to reply and make a deliberate mis-statement. Why in the world would you do all those things?

    Never mind, I don't really care.

    Furthermore, why would anyone care whether you buy or sell options?

    #10     Nov 2, 2009