Which Options to Sell

Sell Options that are made up of mostly time premium. Since time decay is unavoidable in options the trader who sells an option generally stands at an advantage. Selling options that are out-of-the-money is a good way to make profits. By selling out-of-the-money options a number of elements work in the traders advantage:

• Essentially a wasting asset that will lose all its value by the expiration date is being sold

• Mathematically speaking, the probability of profit is more than 50%

• Focusing on options with high implied volatility the amount of time premium collected is maximized