The Premium-Selling System: A Rules-Based Method for Selling Options, Tested on Sixteen Years of Index Data
Premium selling is usually taught as a set of slogans: sell at 45 days, take profit at 21, keep delta neutral, sell when volatility is high. This book takes each of those rules, tests it against sixteen years of index option data, and reports what the test said - including the places where the answer is not the one the slogan implies.
What the book covers
Foundations. Options, the four greeks that matter to a seller, implied volatility, and IV Rank, built from scratch. No prior premium-selling experience is assumed.The edge. Why implied volatility sits above the volatility that actually arrives, measured separately in each volatility regime rather than averaged into one flattering number.Mechanics. Where on the expiry countdown premium decays productively, and where gamma risk begins growing faster than the premium being collected.Structures. The put write, the short strangle, and defined-risk iron condors and credit spreads, compared on return, drawdown, and how easily each can be repaired.Defense. What rolling the untested side actually does to expectancy.Portfolio. Position sizing, how many occurrences the edge needs before it becomes visible, and managing delta at the account level.Every number carries its sample size. Where the data contradicts standard teaching, the book says so. The 45-day entry is really a 40-to-50-day zone with no sharp optimum inside it. The 21-day exit preserves profit rather than adding to it. Tight daily delta adjustment does not beat leaving the position alone.
How the results were produced. The backtests are model-based reconstructions built from index and volatility-index history, net of modeled transaction costs. They are not records of exchange-traded fills. An appendix states the method in full, along with what it does and does not support.
Written to transfer. Profit, loss, and margin are quoted in index points. There are no broker workflows, tax treatments, or contract specifications. The NIFTY 50 index and India VIX serve as the laboratory because the pairing gives a liquid European-style option chain alongside a matching volatility index; the mathematics carries to other index and equity options without modification.
This book is educational material, not investment advice. Options carry risk of loss, and an undefined-risk short option position can lose more than the premium it collected.
Customer Reviews
ThriftBooks ® and the ThriftBooks ® logo are registered trademarks of Thrift Books Global, LLC
