Selling Naked Calls?

In a thread below, Wild Bill says that there is positive EV in selling naked calls. I have heard this from others as well. The claim is that this "good play" is avoided by most people because of the risk involved. I think some believe that calls are generally overpriced because people like to go for jackpot scores. I have no idea whether this theory is correct or not but I am sceptical for a few reasons. One of course is the spread, which is very high on low priced, out of the money options. Also I would think that the price is kept down by those who are writing covered calls. They are hedging. And in all gambling that I know of, hedgers are taking the worst of it in return for reducing volatility. If so, the option can't be a pos EV sell. Add that to the fact that there are experts out there with big money who can easily afford the risks on both sides. Doesn't it stand to reason that they will drive down the price of an overpriced option?


Obviously if it is true that selling naked options is a bad play it would be because of the rare calamity that would befall the naked seller. But because of its rarity, meaning that the great majority of naked sales show a profit, might it not be that this widespread belief that selling naked options is positive EV, is in fact wrong? I believe we have readers out there who KNOW the right answer to this question and I hope they tell us.