Selling Options / Covered Calls for income

[trowelhead]

Anyone here into selling options as an income strategy?

Not to speculate, as in taking premiums for providing insurance. This sort of thing?

https://www.amazon.co.uk/Option-Traders-Hedge-Fund...

Or even selling covered calls etc?

[Condi]

You couldnt find me a barge pole long enough...


Professionally, with access to markets and the right hedging tools (not to mention the company capital), granting options is a risky business. From home, part time, without all the access to cheap (ish) hedging tools its probably the easiest way to lose a lot of money I've ever seen.


There are more examples than I can name of companies and funds which have gone bust from options trades gone wrong.

[limpsfield]

I do it and have known people who have done it for a living.

There's a great saying - options sellers eat like gnats and st like elephants.

I wouldn't discourage you from trying, but do it with a percentage of your overall risk capital and not all of it. Months of profits can disappear very quickly in an adverse market reaction.

[limpsfield]

I think this is a good place to start, although of course you can't beat the white knuckles of real experience

https://www.amazon.co.uk/Complete-Guide-Option-Sel...

[Derek Chevalier]

limpsfield said:

I wouldn't discourage you from trying

I would.

[sideways sid]

I sell covered calls on shares owned within my SIPP.

There are many options trading strategies that can produce erratic losses, but straightforward covered calls is not one of them if risks are understood and you're comfortable to hand over some share price growth.

I reckon my alpha conviction calls (long positions in certain companies) are wrong more often than written calls, so the effect of the strategy is accretive.