I primarily base my trades on futures chart analysis and typically execute my trades using options. I’m looking for some advice on whether it’s generally better to buy options or to sell options.
Specifically, I’d like to understand which strategy—buying or shorting options—would be more advantageous, and at what times should be be a buyer/seller?
I’m interested in your experiences and insights on when each approach tends to work best. Any guidance would be greatly appreciated!
If there was a clear answer to that, everyone would do the same. It is true that options buyers lose money more often than sellers. When your capital is small, you are basically forced to do buying. And since most people don’t do position sizing, one bad day is enough to wipe them out.
But with option selling, you need to provide a margin, that limits you to risk only a small fraction of your capital. It is often possible to have the same payoff graph with both option buying and selling, but buying will need less margin and fewer legs (hence less brokerage).