Overview
Most new traders start by buying options, hoping for big gains with small investments. But the truth is, option buyers have to be right fast — about both direction and timing. That’s why many experienced traders prefer to be on the selling side, where the odds are stacked more favorably.
When we sell options, we become the “house.” We’re betting that the option will expire worthless, allowing us to keep the premium as profit. This approach often has a high probability of success — usually 60–85% — depending on the strike price and expiration. Time is on our side, because every day that passes reduces the option’s value (thanks to time decay).
Example
Let’s say a stock is trading at $105, and we sell a $100 PUT for $2. That means we collect $200 upfront (1 contract = 100 shares). If the stock stays above $100 by expiration, the PUT expires worthless, and we keep the full $200. Even if the stock drops a little, we still win — because we only get assigned if it falls below $100. That gives us a buffer and a higher chance of profit than buying a CALL or PUT.
Conclusion
By selling options, we’re getting paid to wait, and we only take action if the price moves dramatically. It’s a smart way to generate steady income with controlled risk, especially when done on quality stocks we don’t mind owning.