What is Option Writing? Why 90% Traders Get It Wrong!Hello Traders!
Today, let’s break down one of the most misunderstood strategies in the options market — Option Writing . While it’s known for generating consistent income, the truth is that most retail traders get it wrong . Why? Because they don’t respect the risk, structure, and psychology behind it. Let’s understand what option writing really is — and how to do it the right way.
What is Option Writing?
Option Writing = Selling Options: You sell a Call or Put and receive a premium. If the option expires worthless, you keep the entire premium as profit.
Time Decay Advantage: Option writers benefit from Theta — the value of the option decays with time.
Range-Bound Bias: Works best in sideways or non-trending markets, especially on expiry days or low-volatility phases.
Why 90% of Traders Get It Wrong
No Risk Management: Most sellers don’t hedge or define SL. One sharp move can wipe out weeks of profits.
Overleveraging: Selling options without understanding margin, exposure, and volatility leads to quick blowups.
No Data-Based Strategy: Randomly selling options without understanding OI, IV, VIX, or market structure is a recipe for disaster.
Wrong Market Conditions: Option writing during trending or breakout phases leads to big losses — especially for naked writers.
Rahul’s Tip
Sell options only when the odds are in your favor — backed by data, structure, and proper hedging. And always treat this like a business, not a shortcut to income.
Conclusion
Option writing is a powerful income strategy, but only when done with the right mindset and discipline. Most traders lose because they sell with greed and no system. If you want to win, study the Greeks, respect the risk, and manage your capital wisely.
Are you an option writer or planning to learn? Drop your experience in the comments! Let's build this together.
