Are naked calls/puts insanely +EV? What am I missing here?

[NajdorfDefense]

[ QUOTE ]
[ QUOTE ]
I don't know anything about options but as a guess I'd say there are some aspects of the stock that would be impossible to compute mathmatically that are priced into the options.

[/ QUOTE ]

The formula is only theoretical but I want to know why it's always pricing the options lower than they are trading for.

[/ QUOTE ]

Your assertion is false for one thing.

Secondly, markets are discontinuous is the biggest risk, i.e. blowup risk.

Third, no matter how good you are at poker, you don't have NEARLY the bankroll to sell naked options. Not even close. I required my old trading clients to have > $100mm liquid to start doing those trades. Some years you make $12mm net, others you lose $4mm [or more.] It's a very rough way to make an easy living.