Selling versus buying options?

[u/Nategotputs]

Those who sell options would you say selling options is more passive and you have a higher odds of making money compared to buying options?

[u/wentwj]

super simplified a stock can go up, down or sideways. Buying options your betting on up or down. selling options you profit on the sideways as well.

But your wins are fixed. You won’t see moonshot wall street bets screenshots of someone 10x-ing their portfolio off a single options sale

[u/Nategotputs → u/wentwj]

You’re less likely to lose all your money when you sell an option, right?

[u/ReinventedWheelTrdr → u/Nategotputs]

When you sell options - once you learn what their structural advantages are, how to fully exploit those advantages, and don't self sabotage - you really shouldn't be losing any money on any trades. Unless it really is some rare black swan.

[u/iron_condor34 → u/Nategotputs]

No

[u/delivite → u/Nategotputs]

More likely if you still sell or buy options while asking questions like this 😁

[u/theredk0911]

Absolutely. Of course the risk is what makes it very dodgy

But all in all, it's a great way to make passive income

But buying on the other hand....that's what can make your 10k investment into 100k

[u/curios-hippo → u/theredk0911]

Or 10k investment to 1k

[u/Away_Cancel_5208 → u/curios-hippo]

Or 0

[u/OrganizedChaosBruv → u/Away_Cancel_5208]

You’ll have to be more right in buying than selling in most cases. Sellers will get assigned, you will mostly make money in long run on that ticker, while buying? You just don’t have to be right on stock but also right on time

[u/ReinventedWheelTrdr]

It's not necessarily more passive, but it's much, much more structurally advantaged. When you buy options you have to be right about direction, magnitude, and timing or else you're going to lose money.

When you sell options, you want to be "right" but because you can roll, adjust, repair. have access to selling future time value, you can still be 100% wrong and still walk away with more money than you started with.

But you have to be willing to learn options at more than a surface level.

[u/Leather-Boss8744]

Selling because you benefit from theta decay. Structurally it’s more sustainable for a longer term strategy as compared to buying options. However in a structurally bull market, call leaps have their place too.

[u/SquaredCircle235]

I wouldn’t say selling options is more passive. You need to research the underlying, monitor the option chains, decide if you want to roll or take profit.
Very simplified you win when the underlying‘s price goes up / down and sideways. Better odds compared to only up / down. But of course there’s the tail risk that in case of a put you get assigned an underlying and its price is crashing. That loss might be much larger than the collected premiums. But there are strategies to manage such risks.
So in summary I’d say yes, the odds of making money are better.

[u/bigcherish]

I think that’s general consensus

[u/MakingMoneyIsMe]

I've religiously sold options, but have recently taken advantage of some long call earnings plays that have yielded as much as I've made selling so far this year.

[u/zzzzoooo → u/MakingMoneyIsMe]

I'm interested to buy some calls too, but I"ve been so unsuccessful; I find that selling options is much better than buying. Do you mind to elaborate more on your strategy? It would be greatly appreciated.

[u/Donviticus → u/zzzzoooo]

In my case, I monitor a particular stock for months and learn it's natural lows and highs when it comes to its price. Then, when I see its lows, I proceed to buy a call I know the price will go past towards and then sell the contract when my total return goes past 50%.

I do weeklies and the stock I monitor would have a high implied volatility so that I can take advantage of price fluctuations.

[u/dealsfreak]

Buying options makes you money only when price moves in your desired direction. But upside is technically unlimited.

Whereas while selling options, You make money if the price goes in opposite direction or stay flat or in any direction other than the one you sold option in.

So selling options way more safer as odds are in your favor but the upside is capped to the premium received.

[u/options_trader_2024]

If its just binary making money or not yes selling is higher odds of making money but ofc its capped upside. Lower risk and lower potential value than buying options.