🧠Trading Psychology and Timing in Selling Options
When selling options — especially puts — timing plays a crucial role. It’s not just about collecting premiums, but also about understanding market mood, volatility, and upcoming events . 1. Choose Calm Market Periods Selling a put option works best when the market is relatively stable. Avoid weeks with earnings announcements , Fed meetings , CPI releases , or major global events , since they can create unpredictable price swings. These events can push your strike price into danger and increase the probability of assignment. 2. Understand Volatility Behavior Before big events: Implied volatility (IV) rises — premiums are high, but so is risk. After the event: IV usually drops — this “IV crush” benefits sellers because option prices fall quickly. If you want safety, sell after the volatility settles. If you’re confident in your prediction, selling before the event can earn higher premiums — but take smaller positions. 3. Think in 7–14 Day Windows (Sometimes, 4 weeks....