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comment by ahosai

If you buy an option your loss is limited to the premium you paid but your profit potential is unlimited. The exact opposite is true if you sell an option - your profit is limited to the premium you collected for the sale but your loss potential is unlimited. Most retail brokerages won’t allow you to sell options unless you are hedged against losses, but they don’t quantify how much you need to be hedged. So any retail investor with an options account could sell an option for say $100 as long as they are hedged by buying a corresponding option, but that hedge could limit losses to $100 or $100,000, the brokerage doesn’t care. My guess is this guy leveraged his margin account and sold a shitload of options but bought the cheapest hedge allowable. When the trade went against him He realized why the hedge was so cheap.

The first rule of selling options is don’t.

If you still want to sell options watch this apology video from James Cordier who spent decades making hundreds of millions of dollars selling options until he blew up over 24 hours on a single trade selling options on Nat Gas.