Underlying stock/index suggestions for Covered Call Strategy

R

rakamaka

Member
#1
#1
I would like to try covered call strategy. Where you hold stocks and sell OTM calls for near expiration date.
Can you please suggest any good stocks or indexes for this strategy? I am looking for options having good liquidity and volume.

This leads to another question. Why volume of option trading in India is very thin. Many times my order dont get filled at all. I use icicidirect but any other nice broker suggestions are also welcome.
Thanks
 
bandlab2

bandlab2

Well-Known Member
#2
#2
you are tryin to do the things in reverse. first buy a good stock that you think would go p, then to hedge that write a call at OTM.

In india options trading is very thin and you will see very less or no volmes in most of index stocks at OTM. Try reliace, RPL, LT etc. but yo need to buy one full lot atleast
 
A

ARMHM

Active Member
#3
#3
rakamaka said:
I would like to try covered call strategy. Where you hold stocks and sell OTM calls for near expiration date.
Can you please suggest any good stocks or indexes for this strategy? I am looking for options having good liquidity and volume.

This leads to another question. Why volume of option trading in India is very thin. Many times my order dont get filled at all. I use icicidirect but any other nice broker suggestions are also welcome.
Thanks
Click to expand...
Better stick to nifty future if you want to write any covered option. Only nifty options have good liquidity. Besides you dont have to worry about option being exercised because of European style option. It will be exercised only on expiry. The present scenario is sutable to short nifty future and sell nifty OTM put.
 
A

AW10

Well-Known Member
#4
#4
You will find good volume in Reliance and RPL options on most of the time. Everyday, some or other stock which is in news might show pickup in option volume but that needs to be tracked during market hours. I visit NSE site during mkt hours to find the stocks that are showing good option volume.

Watch out for Bid price of option and don't rely on last traded price. Due to limited liquidity, slippage might be large.

Happy Trading
 
You must log in or register to reply here.
Thread starter Similar threads Forum Replies Date
R BeginnerQ:Is Options profit calculated based on the premium r underlying's movement? Derivatives 6
S Buying underlying stocks using Options Swing Trading 3
S December quarter results impressive, but underlying story is worrisome Fundamental Analysis 0
A What happens when you BUY a PUT Option without owning the underlying stock? Derivatives 5
D Do you need to own the underlying stock before you write an option? Options 4

Similar threads