Maybe its just me, but I have found options extremely difficult. You have to be right on the money. With futures, I love the leverage and the liquidity
I left option trading and returned to futures many years ago, so I do not know what they are like in today's trading scene.
The wasting time decay is the most important. It is where the market makes its money from option buyers. I did all kinds of calendar spreads and other hedging tactics. It is all very complicated, IMO, compared with futures trading. Finally, I made money by buying far out, safer, options that had a lot of time before the wasting part of the option started. These prices reflected the moves of the asset but, IMO, were too expensive for the reward and the buyer had to have made his money and be out before that happened. I decided that futures trading was more profitable for the risk involved.
If I remember correctly, the time wastage started, seriously, about three weeks and, then, dried up a few days before expiry.
Anyway, as I said, I've forgotten a lot and others will have more up-to- date experience.
Covered options are used by those portfolio owners who do not want to sell their assets during a bad patch, to hedge their holdings. I wager that hedge funds have been doing that, very profitably, indeed, over the past 5-10 years , while, still, retaining the shares. They sell the option to others but at a price that, if unfortunately exercised, will leave them a profit on selling. IOW, their risk is that they may have to take a smaller profit. The option money is theirs to keep, in any case, and they have it, all, worked out before they start, which the ordinary trader does not.
I hope that this, probably, out of date information helps those who only see the pie in the sky.
Good trading.
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