Robinson, J. [Options Trading University]. (2019). Introduction to Options (Part II) [Video File]. Retrieved from https://followthemoney.com/options-trading-university/
Continue Learning Key Concepts, With A Special Emphasis On Understanding Put Options. See part I: Introduction to Options (Part I)
What's a real-world analogy (like the boat) of when you'd want to buy a put?
What are naked calls, and how are they more risky?
What are statistics around sellers being the winners in this game?
There are so many noob speculator buyers coming into the options market that don't actually exercise their rights to buy the stock back later that it makes it lucrative for options sellers to be smart and make money.
When a seller sells a put, they're obligated to sell their stock when it reaches a price below the current value. The other side, the buyer, is creating insurance so that if their stock goes down, they'll be guaranteed that it'll be sold at a certain lower price - to hedge their losses.
A seller makes money because they're banking on the buyer being wrong. So they keep the premium and sell the option again and again each month.
202009231919: I feel quite the ethical dilemma selling options. It's lucrative, but it's also you're playing your cards to more or less guarantee the buyer will be wrong. And while they have the agency to do whatever they're going to do, I don't know that I want to be the one that shafts them because they;re too dumb to do their research.
Robinson, J. [Options Trading University]. (2019). *Introduction to Options (Part III)* [Video File]. Retrieved from https://followthemoney.com/option...