Selling option premium allows you to collect cash dividends that are credited to your brokerage account from the sale of call options.
For example my brokerage confirmation below shows that I sold 2 Apple Jan 230-Strike call options at 58.08 points. This resulted in $11,610.27 in cash being credited to my brokerage account after commissions. I get to keep this cash dividend regardless of the movement of Apple stock.
Rolling over your cash dividend trades as options expire allows you to collect a substantial amount of cash that provides protection if the underlying stock declines in price.
In this video you will see an example of one of my trading accounts that started with a $311,800 balance. Over a six month period I rolled over my cash dividend trades and collected a total of $152,900 in cash dividends which resulted in a total cash dividend of 49% of my account starting balance.
Collecting a 49% cash dividend provides substantial protection if the underlying stock declines in price and can result in a high percentage of winning trades even if your market timing is not very accurate.
In this video you will also see an example of a bearish cash dividend trade that profits as the underlying market declines in price.