Some sprinters can finish a 100-meter race under 10 seconds. Some tennis players can return serves over 125 mph at Wimbledon. Can everyone on Earth achieve such tasks ? IMHO: The answer to your question is "YES". However, it is very difficult to have good returns with small draw-downs for a long period of time (eg. 20 years). It requires a lot of hard-work, talent and luck.
and to think I almost posted the formula for you clowns. have fun believing in your edge, outahere brutha.
You my want to read the first 20-30 pages of this thread. Remember that though one could argue that long put is synthetically equivalent to short call, Short call has theoreticaly unlimited risk (takeover, earnings surprise, etc) so that the risk profile is different. Maybe they should say unquantified risk, the word unlimited I reserve only for deity. http://www.elitetrader.com/vb/showthread.php?s=&threadid=53037
Option writers will discover just how efficient the pricing of options is. After you allow for all fees and expenses (not to mention risk), the average option writer over a 20 year period will likely find they did not make any money. Yes, time decay. But you also have capped the profit potential, so you will find it a wash long-term. That is, if you don't get wiped out and blindsided by the event that you thought you had accounted for.
*sigh* so young, yet so gullible... You are not going to find an edge by being clever or through trickery. You are just going to enrich your broker. Stay away from Liberty "Write options Instead!" or TMTT or Investools or get-rich-quick seminars. Your current level of understanding is similar to road kill.
this guy has one of the best records in managed money. he sells options. selling puts is no more risky than owning stock. selling calls is no more risky than shorting stock. http://www.ansbacherusa.com/files/optionstrader0106article.pdf
Possible, yes. Ansbacher has done so, for years. He has proven it is possible. Are you as talented as Ansbacher? It will take 20 years to find out. You can write uncovered ("naked") options, or covered ("spread") options. They have different risk/reward profiles. Ansbacher offers both, but the vast majority of his customers have invested their money in his "naked" option selling program. For what it's worth. Remember that just because you refuse to forecast future PRICE DIRECTION (your "market neutral" selling point), doesn't mean that you also must refuse to forecast future VOLATILITY. You can sell options when you forecast volatility to decline, and not sell options when you forecast volatility to increase. If your forecasts are accurate, it will improve your option selling profits. You can also use the Don Fishback "ODDS" method of market neutral option selling. You can calculate (using some proprietary and hopefully positive-expectation formula) the "fair value" of selling an option strangle (for naked options) or selling an option condor (for covered options). You can place a limit order which only sells these options when you are getting paid more than "fair value". If your calculations of fair value are accurate, it will improve your option selling profits. Fishback will sell you his "ODDS" methodology for $0.5K to $5.0K depending on the venue. It's not worth the money; his idea of "fair value" is just the Black Scholes option valuation.