Why I sell options on my long-term positions

There's a common framing of options selling that I think gets it backwards: that the premium itself is the goal. It isn't. The goal is to collect a small, steady payment for being willing to do things I'd want to do anyway.

The two-question test

For every position where I sell options, I ask two questions:

1. If the call gets assigned, am I happy at this price? If the answer is yes, I sell the call. The premium is rent on a ceiling I'd be willing to accept.
2. If the put gets assigned, do I want to own more at this price? If yes, I sell the put. The premium is a discount on a position I was going to add to anyway.

If the answer to either is no, I don't sell the option. It's that simple.

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Why this works

Most premium-selling failures I've seen come from selling options on positions the seller doesn't actually want at the strike price. They're chasing the income. When the market moves against them, they're stuck — either taking a loss on assignment or rolling forever to avoid one.

The two-question test prevents that. Every contract I write is essentially saying: I'm fine with what happens at this strike. I'm just getting paid to wait and see.

A note on size

The other failure mode is over-collateralizing. If 80% of your capital is tied up in cash-secured puts, you're not investing — you're running a synthetic short-volatility book. I keep premium-selling capacity capped so I'm always able to add to a real position if the opportunity is too good to pass up.

Premium is a tax I collect on impatience. It's not the thesis. The thesis is owning the right things for long enough to matter.