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CALL - PUT WRITING IS GOOD WAY OR NOT ???????????
| From : Rajesh Jindal at 10:00 PM - Nov 12, 2009 ( ) |
Share it on FacebookANY STRATEGY FOR SAFE OPTION WRITING ?????????????
IF ITS RISKY THEN WHY RISKY ?????????????
IF ITS PROFITABLE THEN WHY ????????????
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MY OPTION STRATEGY STRAT FROM 1ST DAY OF NEW SERIES . 1ST STEP -- ASSUME NIFTY PRICE IS 5000 . 2ND STEP-- I SELL 4800 PUT AND 5200 CALL . NIFTY ASSUME CLOSE AT OR ABOVE 5100 IN ANY OF NEXT TRADING SESSIONS . MY 3RD STEP � EXIT FROM 5200 CALL AND SELL 5300 CALL AND 4900 PUT . ASSUME NIFTY CLOSE AT OR ABOVE 5200 IN NEXT TRADING SESSIONS . MY 4TH STEP � EXIT FROM 5300 CALL AND SELL 5400 CALL AND 5000 PUT . ASSUME NIFTY CLOSE AT OR BELOW 5100 IN NEXT TRADING SESSIONS . MY 5TH STEP � EXIT FROM 5000 PUT AND SELL 5300 CALL AND 4900 PUT . DO SAME TILL EXPIRY ����WITH MOVMENT OF EVERY 100 POINTS . MY DIFFRENCE IS 200 UP N 200 DOWN SAFE TRADERS CAN TRADE WITH 300 POINTS DIFFRENCE . ACCORDING TO ME NO LOSS IN THIS STRATEGY BUT I AM NOT SURE ABOUT IT . PLEASE SHARE YOUR VIEWS...............
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RAJESHJI, ANY UPDATE ON YOUR ABOVE MENTIONED STRATEGY... ?
This is good way of earning the premium,Only thing u should know the suport & resistance.People could earn easily 5-10% retuns on this.Rakeshji correct me if i am wrong.But could u pls explain me how to calculate the margin,i am bit confused here.I just share my view i may be not be correct as well.
Rajesh Ji...from my very litle experience...in options ..call put writing can be profitable...in options..due to premium earned....but with the trend...if bullish..thn write the puts below the strong support levels....so can earn premium...but it takes patience...to wait till expiry...good way is suppose now nifty closes above 5280...some day..or 5290..thn the options in april like 4900 pe...5000 pe..5100 pe..can be written for a btst gain....If we are writing options for level like 5400..it may give returns but still is risky....if the expected upmove aint thr..but the reward is max in tht too,,,for call writing.....I would say...those calls way above resistance levels...like 5400 or 5500 may be written..to get benefit till expiry..if expiry is very close...just a learners view sir..
My current trade in Nifty is as follows... Sold 5400 nifty call @ 57 and for every 3 calls written bought 1 futures @ 5240... will exit the futures at the appropriate time if Nifty goes down below 5200.. if nifty goes above 5310 buy additional futures to hedge my position... I will end up in profit where ever nifty goes by the end of April....
My view is that option writing is much much safer than trading in futures... returns will also be less.... but important factor is that risk is much less compared to futures...
good noon JINDAL sir,...we all r waiting for your option writing strategy here very eagerly.....pls post it if u feel comfortable for the same.....
| Barun Biswas at 06:55 PM - Feb 21, 2010 (1 hours ago) |
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barun ji .. this is not my final strategy .. it comes only from discussion ... i will disclose my better option writing strategy in coming days .
sir when Nifty moves 100 points up you just square off the call position & write call & put of next 100 points up but should we hold our initial put writing( here 4800 put,as per ur example)or square off that? Regards..
prasad amswer is good for vivek . and for prasad query = i m not in favour to hold a lossing position , so exit is right way.
Dear Vijay, you said that you are successfully applying this strategy for last 2 months. Will you give explain with your experience atleast for one month. Thanks in advance. - Nitin Potade
You need not cover the 4800 PUT as it is already in profit but the idea is to cover the 5000 CE and SELL 5100 CE and 4900 PE so that you will have 1 CE and 2 PE short position while Market is moving UP and you will cover your losses of 5000 CE from 5100 CE premium. In NEXT STEP IF MARKET FURTHER MOVES UP you will cover your CE and go on writting PE but in case MARKET reverses you will cover PE and foget CEs. The idea is to get profit by having maximum/more shorted PEs in UP MOVE and write CEs in DOWN move. I would add something in STEP one if MARKET moves to 5000 instead covering the exact CE cover it by CE STRIKE PRICE+100 CE e.g. instead of covering 5000 CE cover it by buying 5100 CE and WRITE 5200 CE and 5000 PE. Please verify if this works or not. Mr. Jindal please comment. Regards,Prasad
Rajesh Ji, it seems to be a good strategy. However, some observations on it: 1. when Nifty moves from 5000 to 5100, as per your step 2, we have to sell 4900 Put. Do we have to exit 4800 put at the same time? similarly when nifty moves from 5100 to 5200 do we have to exit 4900 put while selling 5000 put. If not, then in the fifth step, we are again selling 4900 put. that means we will have 2 lots short of 4900 put at that time. 2. I think when nifty is moving up, we are booking losses while shifting to next higher call. (for example when nifty moving from 5000 to 5100, we are exiting 5200 call at a loss). However, if at the same time we buy back 4800 put while selling 4900 put, we will more than cover that loss because of time factor on our side.(loss of premium due to time will favour option seller) Please clarify if my understanding ir right or wrong..Thanks
Mr.Rajeshji, I was thinking and discussing with others about this strategy. Thanks for giving more clear picture about this strategy including the possibilities of futhur happenings. Pl let me know that as per your strategy, what may be the Margin required taking into Mark To Mark losses. Your reply will be much appreciated.
Absolutely. Write Karo and go to SLEEP. This is the BEST WAY TO EARN with 100% gurantee. Regards,Prasad
FOR BARUN BISWAS - DEAR FRIEND .. CALL PUT BUYING IS RISKY GAME IF YOU DONT KNOW ABOUT TREND , BEST OPTION ALWAYS SELL CALL AND PUT OF NIFTY AND SLEEP WITHOUT TENSION.
BUT CALL - PUT WRITING IS WAY TO WEALTH . YES I AGREED LARGE CAPITAL REQUIRED FOR OPTIONS WRITING .... BUT THE QUESTION IS THAT IS IT GOOD OR PROFITABLE STRATEGY ??????? IF NO THEN Y BIG PLAYER DO THIS ........IF YES THEN TELL ME RISK FACTORES OF STRATEGY ACCORDING TO YOU.
Well said Mr Jindal. Appreaciate you strategy! Regards,Prasad
I have one question to Rajeshji or other seniors,master in option trading.. Instead of selling PUT & CALL ,as per Rajesjis strategy ,can we buy a Put & call & doing the same as Rajeshji does? Is it profitable ? Less risky? please clarify. Regards.
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