The risk premium is the excess return sellers earn for bearing risk — Nifty options carry one because fear is priced. Selling defined-risk spreads captures part of it without naked exposure. The filter avoids harvesting into stress when the premium is a trap.
Harvest slowly, size small, respect regime. The premium exists because crashes happen; the framework stands aside when VIX z signals one coming.
Q: What is the risk premium?
A: Excess return sellers earn for bearing risk, priced into IV.
Q: How to harvest?
A: Defined-risk spreads, small size, regime-aware.
Q: When not to?
A: When VIX z signals stress; premium becomes a trap.
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By Shakti Tiwari · Options AI research pillar. NISM XII certified. Educational only, not investment advice; verify before acting.