Hi,
I need advice on how I can protect naked option selling in extreme conditions.
1. I tend to sell deep out of the money options on second last Thursday or day before that to give only 6 7 days till expiry.
2. I look for stocks that have rallied the month and are touching the resistance levels second or 3rd time. For eg. I sold Apollo tyres 245 calls at 1.5 only 1 lot. It was 230 when I sold.
3. Most of the times the option expires worthless. But sometimes like in todays case, apollo tyres is testing new heights. It can continue to gain or it can fall. That's a chance that I don't want to take.
Is there anything creative I can do at the moment with options right now so that I can be in profit on Thursday in whatever scenario.
I thought of purchasing 240 Call 1 lot. But it turned out that if the stock closes below 240, I will be in loss. If it closes above 245, I will be in profit. So that's my confusion. Open Interest on Apollo tyres 240 call suggests that it wont go beyond it.
But is there anyway, I can take this situation more in my control.
Simply Put, What could an expert option trader might have done as there can be gap up tomorrow because of the buildup today. How would an option trader turned this into a profitable trade.
I need advice on how I can protect naked option selling in extreme conditions.
1. I tend to sell deep out of the money options on second last Thursday or day before that to give only 6 7 days till expiry.
2. I look for stocks that have rallied the month and are touching the resistance levels second or 3rd time. For eg. I sold Apollo tyres 245 calls at 1.5 only 1 lot. It was 230 when I sold.
3. Most of the times the option expires worthless. But sometimes like in todays case, apollo tyres is testing new heights. It can continue to gain or it can fall. That's a chance that I don't want to take.
Is there anything creative I can do at the moment with options right now so that I can be in profit on Thursday in whatever scenario.
I thought of purchasing 240 Call 1 lot. But it turned out that if the stock closes below 240, I will be in loss. If it closes above 245, I will be in profit. So that's my confusion. Open Interest on Apollo tyres 240 call suggests that it wont go beyond it.
But is there anyway, I can take this situation more in my control.
Simply Put, What could an expert option trader might have done as there can be gap up tomorrow because of the buildup today. How would an option trader turned this into a profitable trade.