Skip to main content
Learn

Why Is Selling OTM Options a Common Strategy for Collecting Premium Income?

High probability of expiring worthless; seller benefits from theta decay and zero intrinsic value.
Greeks.Live14.11.25

Why Is Selling OTM Options a Common Strategy for Collecting Premium Income?

Selling OTM options (shorting) is popular because of the high probability that the option will expire worthless. Since OTM options have zero intrinsic value and their time value constantly decays (Theta decay), the seller benefits from both time and the price staying below the Call strike or above the Put strike.

The goal is to collect the entire premium as profit with a high statistical edge.

What Is the Concept of “Theta Decay” and How Does It Benefit an Option Seller?
Why Is the Delta of a Deep OTM Option Close to Zero?
What Is the Relationship between the Option’s Delta and Its Probability of Expiring In-the-Money?
How Does the Relationship between Delta and the Probability of an Option Expiring In-the-Money Affect Trading Strategy?

About

Contact

Editorial Policy

Terms of Service

Privacy Policy

Cookie Policy

© 2025 Greeks.Live

All Rights Reserved

Greeks.Live RFQ

Build by Noo on Engine

Source: The content on this website is produced by Greeks.live's proprietary analysis systems, which utilize advanced Large Language Models (LLMs). This information might not be subject to a full human review before publication and may contain errors.
Responsibility: You should not make any financial decisions based solely on the content presented here. We strongly urge you to conduct your own rigorous due diligence and to consult a qualified, independent financial advisor.
Purpose: All information is intended for informational purposes only. It should not be construed as financial, investment, trading, or any other form of professional advice. News and data are not trading signals.
Risk: The cryptocurrency, derivatives, and options markets are highly volatile and carry significant risk. By using this site, you acknowledge these risks and agree that Greeks.live and its affiliates are not responsible for any financial losses you may incur.