Why do people sell S&P index options

[Nobert]

It can be extremely dangerous if you don’t know what you’re doing.

The oil fund manager, who was crying in front of the camera, would be a great example for this (?) ( can't recall names )

 

[sle]

How what?

How does it make sense to sell puts if you're are already holding S&P?

 

[Handle123]

How does it make sense to sell puts if you're are already holding S&P?

If your trading model shows positive expectancy, extra profits of time decay.

Buffet like on every trade sells options first I think, then waits and buys the stocks. I am not looking to reinvent the wheel.

 

[srinir]

How does it make sense to sell puts if you're are already holding S&P?

In Texas it does

 

[murray t turtle]

Why do people sell S&P index options

-To make money!! Are you seeing the premiums on that option? And it's a weekly option that means income every week!

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Beats buying them, unless your name is Mark Cook+ he has farms...................................................................................Another reason to sell; get something with dividends, not that itś a main reason to buy-itś not.

 

[Saltynuts]

Why do people sell S&P index options

-To make money!! Are you seeing the premiums on that option? And it's a weekly option that means income every week!

I get that. But rolling VIX futures sales generates returns weekly as well. But much, much higher returns apparently. I'm trying to figure out why returns doing that are so much better than the returns selling SP500 options

 

[Saltynuts]

Selling options premium generates consistent and predictable income. It can be extremely dangerous if you don’t know what you’re doing. I’ve been selling options premiufor years, and have developed hedges to prevent catastrophic losses. I am very comfortable with the concept, but most traders should never attempt this strategy.

Yea but it seems the same to me could be said of selling VIX futures, rolling them over time, but it is a much bigger positive expectancy over time, at least historically.

 

[JSOP]

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Beats buying them, unless your name is Mark Cook+ he has farms...................................................................................Another reason to sell; get something with dividends, not that itś a main reason to buy-itś not.

No you don't get dividends when you sell SPX options. It's cash-settled cuz it's an index; you don't ever get the physicals.

 

[JSOP]

I get that. But rolling VIX futures sales generates returns weekly as well. But much, much higher returns apparently. I'm trying to figure out why returns doing that are so much better than the returns selling SP500 options

Not everybody can sell futures. Some brokerages don't allow futures selling and some traders might not qualify or have the margins for it. SPX 500 options is much easier to trade and has much lower margin requirements.

 

[ET180]

Your clueless

*you're / you are