Time for sale

Discussion in 'Options' started by Andy_Trade, Oct 26, 2007.

  1. What is the best way to profit from time decay?

    I would post a poll or something with some options (no pun intended) to choose from but I'm so new at this that I don't really know the choices I would have to give.
  2. One way is to sell covered option contracts, or more profitable ones, naked contracts. Pick contracts with high Implied Volatility.
  3. MTE


    There are ways to profit, but I don't think there's one best way to do it. Some sell naked options, others prefer vertical spreads (bull put, bear call, iron condor/butterfly), calendars, double calendars/diagonals and etc. It's really a matter of preference and the amount of risk you wanna take on.

    Selling high IV carries additional risk due to the fact that high IV means the market expects a big move cause of some announcement or event.
  4. nikko309


    What is the best way to profit from time decay?
    By selling options that move in the right direction.

    Now "What's the best strategy for selling premium?" is a whole different question.
  5. So I'm kind of in a trade off of taking in lower premium at lower risk vs. selling higher priced options with higher IV (maybe) increasing my risk...?