My strategies: Take an example of market situation where Nifty spot is being traded at 5258 with 5200PE of sep. expiry priced at 58. Nifty has already fallen from around 5430 approximately 180-190 points from its current peak in 5-6 trading days, now we are expecting a slight upmove, may be up to 5320. So, I will initiate a naked short postion by selling 5200PE, suppose tommorrow if nifty gives some upmove of around 30-40 points, then in option we will get some around 13-15 points gain or if nifty takes 2-3 trading sessions to move 30-40 points upwards , there too will be the same gain of around 15-20 points and from there afterwards its depends upon trader to book little profit or keep holdinh his position keeping in view of the market condition. Now what if market does not behave my way i.e., nifty moves downwards, then wait til market falls to 5140, at that time 5200PE would be priced at approx.92-97, means we wil be in loss of approx. 30 points, again to cover our loss take one more position by buying 5400PE or 5300PE of the same series(considering prevailing market condition) that would have been trading with merely 3-6 points premium. Here onwards you will be protected from any loss from further downside. Now what if markert moves positively , then cut your position near to nifty spot 5200,. But this would hardly happen and mosstly time decay will also come into effect. Its already a tested strategy and in this series also I am holding sep 5200PE short position initiated on 58, currently priced at 59.55 as on 04 sep02012. Morever one can take risk of rs.500 for earning 2000. How is that please comment