Why Do Traders Often Sell OTM Options?

Traders sell OTM options to profit from the time decay (Theta) and the probability that the option will expire worthless. Since OTM options have zero intrinsic value, the seller collects the entire premium as profit if the option remains OTM until expiration.

This strategy capitalizes on the high probability of an OTM expiry.

At What Point Does an OTM Option Become Worthless?
How Does the Concept of “Time Decay” (Theta) in Options Relate to the Urgency of a Trade during a Mempool Spike?
Why Is Selling OTM Options a Common Strategy for Collecting Premium Income?
Why Is Theta Decay Non-Linear, Especially near Expiration?
How Does Time Decay Benefit an Option Seller?
Why Do Traders Often Sell High-Gamma Options for Income?
Why Is a Short-Term OTM Option Considered a High-Risk, High-Reward Trade?
What Is the Impact of ‘Theta’ (Time Decay) on Out-of-the-Money Crypto Options?