How Much Can You Earn Selling Options? (Ask This Instead)

This is the evergreen question that every new options trader asks: “How much can you earn trading options?” And I’m sorry if my answer disappoints you — but that’s actually not the best question to ask :)

I have at least three better alternatives that could lead you to better answers:

How much can you earn as an option seller? (yes… seller, not just trader)
How much risk I am comfortable taking on?

And lastly my favourite one — probably the ideal question for a beginner: “Is options trading a strategy that fits my personality?” Stick with me until the end and you’ll get all of these answered.

What is your purpose?

If you decide to get professional financial advice, one of the very first assessment questions is about your financial goals — how long you want to invest and what you want to achieve. This is because your goals are what actually define the most suitable investment vehicles to get there.

As an example: if your goal is to maximise growth over the long term in a completely passive way, you should probably consider a well-diversified ETF (Exchange-Traded Fund) or a combination of ETFs — as perfectly explained by the legendary John Bogle in his timeless book “The Little Book of Common Sense Investing”. You can expect an average return of 9-10% per year and let the compounding effect do the work for you.

What is your risk tolerance?

If you really can’t tolerate market swings and want immediate liquidity, maybe a Money Market Fund is a better fit. Over time returns roughly keep pace with inflation — so you won’t get rich, but you will preserve purchasing power and sleep very well :)

If you are ready to play the markets

If you’re ready to engage with the markets, willing to commit a few hours per week to trading, and want to beat the returns stated above — it may be time to look into options. In my previous post, I already explained why you should focus on options selling if you want to do it consistently over a long period of time.

And the beautiful thing about options is that you can actually be in charge of your own return projections and risk, based on many parameters within your control:

∆ (delta) lets you control the probability of a contract expiring in your favour
Expiration date lets you control how much time value you want to capture — and how quickly
The underlying (a stock, an ETF, etc.) lets you control how much risk you’re taking on
Current market volatility helps you decide how much of your portfolio to actively trade at any given moment

These and other factors let you dial in how profitable your trading strategy needs to be. A realistic return range for an options seller runs from 8% to 36% per year, depending on the risk you’re willing to take. I personally aim for a maximum of 24% — anything beyond that is above my risk tolerance.

Let me break that range down into three approaches — and be honest about which personality type fits each one.

The Conservative Approach (8–14% per year)

This is where I’d tell every beginner to start. You’re selling options with a low delta (0.10–0.20) — meaning you have roughly an 80–90% probability of the contract expiring in your favour. Your underlyings are large, boring, well-known names: broad ETFs like SPY or QQQ, or blue-chip stocks you’d genuinely be happy to own for years. You’re aiming for a VIX somewhere in the 15–25 range — enough to make premiums worth collecting, not so high that the market is pricing in chaos.

Who this fits: you check your portfolio once a week, you sleep fine regardless of what the market does overnight, and you care more about building a sustainable habit than maximising returns. You might even have a full-time job and want this to run quietly in the background. 8–14% sounds modest — but compounded consistently, year after year, it beats the vast majority of retail investors. Start here.

The Balanced Approach (14–24% per year)

This is my personal target range — and I think it’s the sweet spot for most serious options sellers. You’re working with a delta of 0.20–0.30, collecting meaningfully higher premium per contract. Assignment happens more often — when it does, you simply switch to selling covered calls on the shares you now own, collecting premium while you wait for the price to recover or grow. If the stock pays dividends, that’s a bonus too. Your universe expands to include individual stocks with strong fundamentals, stable businesses and liquid options chains. You’re also starting to pay attention to IV rank — selling when implied volatility is elevated relative to its historical average, and stepping back when it’s low.

Who this fits: you genuinely enjoy the process, not just the returns. You like having something to manage, you’re curious about the mechanics, and you don’t mind spending a couple of hours per week on your positions. You’re comfortable with occasional assignment and you’ve accepted that some trades will require adjusting — and you still sleep well at night. This is the range where options trading stops feeling like a side experiment and starts feeling like a real skill.

The Aggressive Approach (24–36% per year)

I’ll be honest: I don’t trade here often. Not because it doesn’t work — it can — but because it demands active management and emotional discipline that I wouldn’t recommend for beginners. You’re selling higher delta options (0.30+), frequently rolling and adjusting positions. Your underlyings are more volatile — individual stocks with higher beta, names that move more. You’re highly sensitive to volatility spikes, and when the market turns quiet, premiums dry up fast.

Who this fits: you enjoy complexity, you’ve built your rules through experience, and you don’t panic when a position moves against you. You likely operate on margin and are comfortable bending some of the conservative rules beginners rely on. If that’s not you yet — don’t start here.

If you’ve made it this far, here’s a small gift: use the calculator below to visualise your potential return based on your portfolio size and trading strategy.

Happy Investing,

Francesco