Thread by @team3dstocks

Here's another reason why every trader should at LEAST understand how options work:

The most powerful people in the stock market (billionaires & >100M millionaires etc) are option sellers. They write calls & puts weekly/monthly & collect free premium. it's like dividends to them

that's the part they DONT want u to know. they want u to believe that they just invest in stocks longterm & just wait for stocks to go up. WRONG!! they make a fat chunk of their gains from just selling premium month after month, since 90% of options expire worthless

So they actually DONT care if a stock goes up or down. what they REALLY want is to collect as much free premium as possible. that's why when EVERYONE is long calls, they want the stock down (so the calls expire worthless). if everyone is long puts, they want the stock to go up

So they manipulate the stock NOT in the direction THEY want, but in the direction where retail will lose the most 💵by expiration. they make their plan based on YOUR positioning. Once u get this, SO much will start to make sense. Retail is playing checkers. They're playing chess.

So if u're trading a stock that has options, STUDY its option chain. See where most of retail is positioned, & know that the smart money is literally on the opposite side. By expiration, they get the last laugh 90% of the time. This is a FAT edge once u get this
#BearTipOfTheDay