1, the option seller has a higher profit probability and can get royalty income.

We know that if the option buyer wants to make a profit, he must correctly judge the direction, the rise and fall, and the time required for the rise and fall. These three points are indispensable. Only by doing these three things at the same time can the option buyer make a lot of money, otherwise most of them will lose.

Option sellers don't have such high requirements for grasping the market. As long as there is no big fluctuation in the market, sellers can earn royalties steadily. It can be said that option sellers win by probability, and small profits gradually become big profits.

Whether selling call options or put options is actually equivalent to selling forward volatility (short-term market volatility). Strong volatility is not good for option sellers, while weak volatility is good for option sellers. The seller's profit point is that he can reap the fluctuation risk premium.

2. Time is the friend of the option seller and the enemy of the option buyer.

The value of options consists of intrinsic value and time value, and the trading of options is actually the trading of these two values. As a time-limited investment product, option itself is constantly depreciating.

That is to say, the time value of options is consumed with time, and the closer to the expiration date, the faster the time value of options decays until 0. If the contract is in the hands of the buyer at this time, the loss of depreciation shall be borne by the buyer, and it is the seller who earns these losses.

Therefore, the time value is the buyer's necessary expenditure and the seller's certain income. The advantage of time value to the seller is that the winning rate will be much higher than that of the buyer. The main profit point of selling options is to earn time value.

For example, many options are virtual when they expire, and their value will be zero, and the buyer of the option will not ask for exercise, so the seller can receive the commission steadily.

3. Option sellers can reduce the risk of single investment by diversifying their positions.

For example, when selling options, use the corresponding assets to "hedge" and reduce the buying cost. At this point, selling options is only part of the portfolio strategy.

Just like an insurance company, the seller can make up for the occasional "disaster" loss with multiple "premium" income. By gathering and dispersing risks, the uncertain individual risks can be turned into collective risks that can be accurately predicted.

In this way, the amount of insurance claims is less than the premium paid by the insurance customer group as a whole, which is the profit point of the seller.