Selling_Options

[zivtheziv]

Well if you sell a spread you win on one side for sure and lose on the other so one cancel the other.

If you sell OTM put for example on $AAPL $100 Put and it goes down to let's say $90 you sold naked put so that means you need to have $100,000 for each 1 put that you sold and buy it at $90,000. you must do it and it's done automatically with the broker. so it's not for it for around $1 credit($100 income)

If you sell naked calls it's even worse than this bad case.

You can sell $120 $AAPL and it goes up to $150 so for the $120,000 that you risked to get around $100 credit , you now owe $150,000.

So I would say that with spreads you risk around 10% from what you risk on selling naked put or calls and you have a chance to get more cash from credit spread selling.