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best option selling strategy
The most profitable options strategy is to sell out-of-the-money put and call options. This trading strategy enables you to collect large amounts of option premium while also reducing your risk. Traders that implement this strategy can make ~40% annual returns.
what is option selling?
Options give you the right to buy or sell a given stock (or another asset) within a given timeframe, without having to pay for it upfront at its actual market price. This way, traders buy the stock only if it has moved in a favourable direction for them — the way they predict it will go.
These are examples of charts .
Disadvantages of Option Trading
- Taxes. Except in very rare circumstances, all gains are taxed as short-term capital gains. ...
- Commissions. Compared to stock investing, commission rates for options, particularly for the Weekly options, are horrendously high. ...
- Wide Fluctuations in Portfolio Value. Options are leveraged instruments. ...
- Uncertainty of Gains.
Why option selling is best?
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