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Is Buying Options Profitable?

Market Measures

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

We often talk about selling options, but is buying options profitable? In this segment, we will look at if buying options is a viable strategy.

The Study The Results
  • Even when managed early, both the straddles and strangles were not profitable.
  • When managed at 50% the strangle had a win rate of 33% and a negative average profit
  • When managed at 25% the straddle had a win rate of 50% and a negative average profit

Although long premium looks attractive in a low IV environment, long straddles and strangles show poor results dating back to 2005

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