Why do people lose money trading options? What is the mathematical edge for selling options?

Most Option sellers (or Option writers) I know are making decent money from selling options.

I have been selling for 15 years, and in the first few years, due to lack of experience, have lost a few thousands here and then. Over the years I have fine-tuned the process and realised the key to profit is:- Don't be too greedy.

Most options expired worthless, roughly 90%.

So learn option selling, it's a good long term income source.

Considering that most options expire worthless, it's worth considering selling instead of buying. Selling gives more consistent income as compared to buying, where you need to be 100% right in your decision to make money. Whereas for selling options, as long as the stock price doesn't go beyond your strike at expiry, you keep the premium, the option position expires and you can start over. It's like being the insurer in the stock market, selling 'policies' and settling claims when necessary. But of cos I'll make sure that there are no claims coming my way. Even when they do, I'll deal with it and throw it out the window, and I'll just continue selling.

The downside is if you are not sure what you are doing and you don't take proper risk management steps. Then your risk may be unlimited.

If you want to start trading options, it's best to find a mentor to teach you as you'll learn faster and will know how to deal with loss making positions. Not to mention usually there will be discounted commissions with the broker.

Hope this helps.