InvestorQ : Is it true that most options expire worthless the world over?
Abhi Yadav made post

Is it true that most options expire worthless the world over?

Answer
user profile image
Abhisha Yadav answered.
2 years ago


It is very important to remember that globally 80-90% of the options expire worthless. That means, as a seller of options you stand a much higher chance of making profits than a buyer of an option. That is why normally it is large proprietary traders and institutions who are options sellers. Retail investors have to be a little more cautious while selling options considering its skewed risk-return structure. Selling options can be a high risk game and it can also be a high margin game, which you may not be able to afford.

As a retail investor, the opportunity to sell options and earn premium is always open to you. But remember that the risks are unlimited when you sell options. But if you are stuck in a position, then selling options can give you a unique way of helping yourself. That is something retail investors can seriously consider! Ideally, retail investors should look at selling options more when it is a covered hedge than when it is an open position.