Hi all,
I had a newbies doubt wrt writing put options.If say,I write the NIFTY 5900 put as I know that the build up of puts at this level offers strong support,I receive a premium of lets say 50.
Once I do this,can I square off my position if the NIFTY moves up?Is the facility to square off available for written puts too?
If in the meanwhile,someone wants to excercise,is it possible that I may be called upon to fulfil the obligation?
The reason why I ask this is , if I have received a 50 Rs/- premium and I am happy with it ,cant I square off when it goes to say 40/- within a relatively short period of time,as I can expect such fluctuations?
I am trying to evaluate the risk in written puts.
I had a newbies doubt wrt writing put options.If say,I write the NIFTY 5900 put as I know that the build up of puts at this level offers strong support,I receive a premium of lets say 50.
Once I do this,can I square off my position if the NIFTY moves up?Is the facility to square off available for written puts too?
If in the meanwhile,someone wants to excercise,is it possible that I may be called upon to fulfil the obligation?
The reason why I ask this is , if I have received a 50 Rs/- premium and I am happy with it ,cant I square off when it goes to say 40/- within a relatively short period of time,as I can expect such fluctuations?
I am trying to evaluate the risk in written puts.