Covered call?

[jaykiru]

Dear sanjay,
what u say is quite right. However , there will be a windfall this month too. market is going to crash, nifty will break 2800. i have bought 10 puts of strike price 3000 at rs. 35. keep watching and enjoy

10 Puts K 10 Lots.. Gr8 Goining keepit up....
Jay

 

[amitt29]

Market timing is difficult but can be done.But it requires gr8 mental stablity and mind wrenching gymnastics. Not thru TA alone.
Warm Regards.

 

[munde_77]

Covered call is a combination of long position in stock through physical or future and short position in option by selling call option. it is a very popular premium earning strategy for option traders and is very effective if used properly.

For example if you have Reliance 300 shares(1 lot) purchased in your account either physical or future let us say at today's price of 980. Now you sell a call option of 1000 strike at a premium of Rs.25 per share which was today's price. you would be in a covered call position.

If Reliance stays above 955 you will be in profit at month end. if reliance remains below 1000 on expiry you pocket total premium of Rs.25 per share and your long position is intact.

If you need to know more pl email me.

There are many more profiatable strategies available.

Did u ever try this strategy ............
let me know your e-mail address so that I can contact you
regards
munde

 

[ashok1010]

Hello Friends,

Is it possible to own a long position in Nifty futures, and then write covered calls or puts on it ?

Would this strategy require me to put any additional margin , apart from the margin used to buy a long position in Nifty.

Hope its not a dumb question

Regards,
Ashok.

 

[aca_trader]

Hello Friends,

Is it possible to own a long position in Nifty futures, and then write covered calls or puts on it ?

Would this strategy require me to put any additional margin , apart from the margin used to buy a long position in Nifty.

Hope its not a dumb question

Regards,
Ashok.

Yes! You would have to pay margin for both calls and futures. With a cash stock, your broker might have allowed you to use stock itself as margin but not with futures.

Regards,
--Ashish

 

[Capricorn]

Has anyone been writing covered calls through the fall. If so what strategy have you adopted. How have you fared in the past 6 months.

Is it possible to make money with this strategy in a bear market?

 

[AW10]

In principle, covered call is a bullish strategy where owner wants to own the stocks (so that stocks are gaining value) and at the same time, wants to collect monthly rent on stock asset.
In bearish market, the value of underlying stock might fall more then the premium collected by selling covered option.. which ultimately results in loss. So, better to avoid in bear mkt or modify the approach and cut Stock position with Stoploss.

I used this strategy during bull market with +ive result but dropped it after getting confirmation of bear market by Feb-08 (and also few loosing trades).

Happy Trading.

 

[Capricorn]

Thanks for the feedback AW, I wonder if there's any one who has managed to recover the entire invested(lot size) amount via premiums on this board .

That would be a win win situation would it not.

 

[bandlab2]

you can write covered call several times in a month. but liquidity is very important. use this strategy as something like ollecting the rent on a building-- not to get the building free

 

[Capricorn]

True, but done over a period of time the building does become free on board does it not ?

Once that happens you can always buy another stock/ building and rent it out.

Is the concept sound you think.