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In option trading, why do sellers always have more scope to win?

Because as an Option Seller I can be wrong sometime on some days and not wrong all the times on all the days. That's the premise on what an Option Sellers work.


Let us suppose all options contracts are to expire today.

Nifty is at 12000.

You are bullish and feel Market can go up till 12100.

You buy a call option of strike 12050 for Rs. 5/- (according to prices at around 11:30 am today.

So if Market were to expire, call buyer can make money only if Nifty expires above 12055. (See the options logic. Cannot explain this)

Now, as a call buyer you are betting or trading on assumption that Market will go above 12055.

As an Option Seller I am writing this option with an assumption that Market may go up, but it will not go above more than 12050.

Now for argument sake, Nifty expires at 12049.

Option bought for ₹5/- is worth 0. Buyer lost the money. Seller earned this money.


Buyer is right by 49 points and lost money. Seller is wrong by 49 points and still made money. Or I can say, buyer is wrong even when he was right by 49 points and seller was right when he was wrong by 49 points.

That is sellers have more chances of making money. Buyers bet where the Market will go. Sellers bet where the Market cannot go.

Its deep. Try to read it again.

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Is option trading worth it?

Short answer is Yes. I have been trading in stock markets for last 10+ years and for 8 years our of that I have been an Options Trader. Trading is like any other business. You buy low and sell higher.


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