Just saw a few minutes ago...Like clockwork!! About 03.4% dividend... https://finance.yahoo.com/news/adm-directors-declare-cash-dividend-163000231.html
The power of options is mainly in leverage and cash flows. It is a very powerful concept if mastered but grossly misused by dilettantes. Options can be used for income, but it usually means for ever 10k you make in "income" you miss something like 40k if you simply traded the underlier, or you make 2k when the market is flat (where you make nothing holding underlier), and of course lose 30k when underlier moves against you.
It's all about Sharpe. If you make 1% per year in a bank account, that has Sharpe ratio = infinity because there's no volatility involved. So options for income is about higher yield than a bank account but lower volatility than plain holding the underlier. For instance since 2000 (the last 20 years) the S&P 500 has a growth rate of about 7% but a Sharpe of about 0.4. That's not so great and depending on when you enter your position, you may start with a huge loss. So if you can make 5% or even 7%, not to talk about 10% in options with a Sharpe of 3-5 or more, that's what "income" with options means. It usually also means the higher the yield the lower the Sharpe.
A lot of prop firms prefer the Sortino ratio over Sharpe. Positive performance volatility is a good thing. It's the nightmarish negative P&L volatility and max drawdowns that keep risk managers up all night.
How do you deal with it, if you don't mind me asking, are you short futures pair trade (with short bias), or do you maintain a long vol portfolio and scalp gamma in order to pay the bill? How do you deal with the timing issue of your short vega positions?
It kind of depends on what you have on and what you're trading. If I've been buying OTM calls and selling OTM puts in a trading session, like what many SPX and NDX MM's are stuck doing all day, then I'll pay up to buy some far out "garbage puts" to minimize the damage on a correction. The same goes for "garbage calls" in right tail risk products like grains, BTC, and probably big upside stocks like TSLA and AMD. Not a big fan of buying far-out wing teenies (less than < 5 delta) outright, but I'll definitely buy them ratio-ed against short "meaty" puts or calls to protect against an outlier move. If I'm stuck short gamma, then I'll keep my negative gamma scalps tight to stay ahead the underlying if its trending. With short vega positions, I'll often butterfly or condor around the shorts to guard against an unexpected move, vs just being short straddles or strangles outright. And I tend to stay away from buying ratios with overweighted legs (e.g. 1 x 3's and higher). You don't want to get a reputation as a trader that blows out accounts. You always want to live to fight another day.