Options Jive - December 18, 2020 - Why Do We Trade Short Options?
Option sellers have been profitable in the long term because they inherently take risk away from option buyers, and option sellers expect to be compensated for this risk transfer. The option seller’s historical long-run profitability does not mean that the market is inefficient. In exchange for the positive expected profitability given to option sellers, option buyers are met with peace of mind and limited risk for each of their trades.