Writing options as a strategy..A suggested Approach

Recently, I tried to explain to a friend the options writing strategy I employ with an example using crude oil. I asked him where he thinks crude oil price is going. Up..he said. Do we buy it now at $132? Maybe so, but I am more inclined to believe that the potential for significant price weakness is unlikely due to the onset of the high demand period associated with the US and European driving seasons. In other words, we’re not going to predict where prices are going. As option sellers, we don’t have to. In the current environment, it is unlikely that oil prices will fall substantially. As sellers of puts, that is all we need to profit. Rather than buy crude and risk a correction, we can sell the Aug $100 Put options for $320 against a margin of $9788 resulting in a potential gain of 3.2% gain for a 55 days play. If crude prices are anywhere above $100 per barrel at option expiration Jul 17, the seller keeps all premium as profit.

Writing options strategy in a nutshell:
1) Select markets with very clear long term bullish or bearish fundamentals. (Right now, softs, gold, dollar, market indexes to name a few examples)

2) Sell far out of the money options 2-3 months of time value in favour of these fundamentals

3) Set a risk parameter that we will strictly adhere to against every option that we sell, then sit back & wait. (This is by far the most difficult to execute. To me, its mastery over oneself & will make or break the trader)

Why do so many people always go after the home run in trading? I've seen so many over the years who are in a highly profitable position only to see the profits fade and ultimately turn into a loss all the while waiting for the big hit. Though 'thousands % gains' do occasionally occur, why not generate profits in smaller increments as well. I've heard it said that no one can get rich selling options. I disagree. Let's say you could net 1.5% per month selling those unexciting options. That would be an 18% gain in a year. Using the rule of 72 and compounding at 18%, it would take about 4 years to double your money. $10,000 could grow to $160,000 in 12 years or $100,000 to $1.6 million in 16 years. As one instructor told me, one of the great ways to make money in the markets is the same way you eat an elephant -- one bite at a time. Don't get me wrong here, I am not saying that this is the holy grail here. There are many options strategies out there. I am merely suggesting this approach for the fact that it is one that has performed most consistently for me & my clients over the past years.