In ranging markets, trend traders suffer the most, but for option sellers, it's the best environment.

The math behind it is simple:

Option pricing is based on the Black-Scholes model, where implied volatility (IV) reflects the market's expectations for future volatility. But historical volatility (HV) is what actually occurs.

90% of the time, IV > HV. What does this mean? The market consistently overestimates future volatility. As a seller, you're essentially selling this overestimation.

Take BTC as an example right now. IV might be pushed higher by various macro news, but if the actual movement is just range-bound trading, the seller captures the returns from IV mean reversion.

This week's Put Credit Spread is a perfect example. BTC has been oscillating between $67K-$71K. If you sold a $65K/$60K Put Spread on Monday at market open, the premium is already in your pocket now.

Another advantage of options relative to spot: time is your friend. Holding spot, the passage of time generates no returns for you; as an option seller, every single day of time decay (Theta) is working for you.

This is why professional traders make option selling one of their core strategies.