Tackle Today: The Options Heuristics Series – Profiting with options as a seller
November 7, 2018
≈ Keep it in your pocket. ≈
Yesterday you’ve learned how options buyers profit. How do options sellers profit?
Profiting with options as a seller: To profit as an options seller, you must sell high and buy low.
Again, this is as simple as it gets. If options buyers profit by buying low and selling high, options sellers profit by taking the opposite route.
It doesn’t matter if you are selling a single put or an entire Iron Condor. If you enter the position with a net credit of $1, for example, the only way to exit this position with a profit is if you buy the contract back for less than $1.
“But how the price of the contract will drop?”, you might ask.
Time. If you refer back to the Absolute Truth #7—published on October 29th—you will see that time is your best ally as an option seller. You sell the contract for a price » time corrodes the price » you buy the contract back at a lower price » you pocket the profit.
You can download and print the flashcard HERE.
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Profiting with options as a seller
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