S.O.S. - Short Option Strangles

Why Short Option Trading in Commodities?

Imagine how much better off you may have been had you sold every option that you have ever purchased.  While stories surface from time to time of traders that have attained huge profits from a single long option play, these tales are rare in comparison to those in which traders have lost some, or all of the premium paid for an option.

Selling options for the sole purpose of premium collection appears to be irrational to the novice trader.  After all, a strategy that involves unlimited risk and limited reward doesn’t appeal to most.  However, a closer look into the reality of the options market reveals an opportunity that even the most skeptical cannot ignore.

In a sense, option buyers are throwing good money after bad in a hunt of that one big market move that could “change their life”.  Given the assumption that markets spend approximately 80% of the time trading in a range, it is easy to see why few traders experience the abnormal returns that drew them to commodities in the first place.

By design, options are a depreciating asset.  Similar to the way that a new car buyer will witness the value of their purchase diminish once the automobile is taken off of the seller’s lot, an option buyer will experience time decay with every passing minute of the option's life.


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Carley Garner Trading Books

  • Higher Probability Commodity Trading, new Carley Garner book

    Higher Probability Commodity Trading, new Carley Garner book

    According to Phil Flynn, Fox Business News contributor, this is Carley Garner's "masterpiece"! Order from Amazon today! "A great read for both beginner and advanced commodity traders. Carley nails the seemingly impossible task of leveling the playing field by imparting vital concepts in easy to digest bites ...she doesn't leave out the harsh realities and heartbreak many overzealous speculators face." -- JON NAJARIAN, co-founder NajarianFamilyOffice.com "I love the book... it's an MBA in trading for the
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  • Commodity Options the Book

    Commodity Options the Book

    It isn't free, but it's close! If this book saves you 2 ticks, you've recouped your investment.   Commodities are hot, as Jim Rogers would say.  Stagnant stocks and the massive bull rally in raw commodities have lured much of the attention away from Wall Street and toward down-town Chicago.  It is difficult to turn on the television or open the newspaper without being reminded of the impact that commodity prices have on our daily lives.   Traders
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  • A Trader's First Book on Commodities

    A Trader's First Book on Commodities

    The Simple, Practical, 100% Useful How-To Guide for New Commodities Traders   Before you trade commodities, you'll need significant practical knowledge of the associated risks and market characteristics. That's where this book comes in. You won't find boring theory or bewilderingly complex trading strategies here. Instead, you will find specific guidance on accessing commodity markets cost-effectively, avoiding common beginners' mistakes, and improving the odds of successful trades. Drawing on her extensive experience teaching traders, Garner shows how to
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  • Currency Trading in the FOREX and Futures Markets

    Currency Trading in the FOREX and Futures Markets

    Get a copy of Carley Garner's latest book at Amazon.com, or any major outlet! "Once again, Carley Garner demonstrates her ability to boil down complex concepts for individual traders. Trading Currencies in the FOREX and Futures Market will put budding currency traders ahead of the curve with its unique blend of the basics and some refreshingly unexpected material." ~ Karris Golden, Traders Press® "Carley is a smart trader and broker; she understands the markets and the importance of
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