Debunking The Myth That 80% Of Options Expire Worthless

| June 2, 2022

Image by Unsplash

Nearly all of Options360 trades come in a type of spread. I believe it’s crucial for positions to have some element of premium collection in order to generate consistent returns.

However, a persistent and pernicious myth regarding options is that 80% of all options expire worthless.  The number belies the fact that most options get closed well before expiration, and can create a misleading belief that selling premium is the only way to make money trading options.

We’ve all seen the marketing emails and promotional literature touting 85% win rates, pushing the concept that selling options makes you “the house” in the great option casino analogy.  While I firmly agree that there are distinct advantages to being a premium net seller, such as the time decay tailwind and a statistically higher probability of profit realization, I think those benefits must be kept in perspective.

Read More

The post Debunking the Myth That 80% of Options Expire Worthless appeared first on Option Sensei.


Tags: , , ,

Category: Options Trading

About the Author ()

Adrian Collins works as an Outreach Manager at Option Dash. Option Dash is always looking forward to offering the best covered call and cash secured put screener on the internet. Adrian is passionate about spreading knowledge on stock and options trading for the rising investors.