Help me wirite a call/put

Thank you Boss!

So it goes to say that I was wrong to have bought back the call that i had written.

Does it mean I could hold on till expiry without fear of it being exercised by anyone? (as you said its European)

somebody please confirm

Thanks

Please please, don't write options without knowing what u are doing.. (And specially when u are running a tight account). If u don't understand the market trend, option pricing behaviour, the short option position would have blown your account on next day market open, if it opens against u.

Dear, risk mgmt is the first thing an option writers consider or they have big account of big ego to handle bigger losses.


It is right, that nifty option can't be excercised before expiry, but they can very well go against you.. and as market moves against you, your option will loose it premium as well as time value every day.. So It is very important for the option writer to understand how the prices of option will move for different movement of nifty.

When you wrote CALLS, you expect mkt to go down. You need to define the your parameter to listen to the market and decide at what level of nifty, u will say that it is not going down but going up.. That is first place when u shd cut your Short position.

Second is place amount based stoploss limit.. say if 20% or 30% of premium is lost, then u will cut your position.

Until, these 2 points are not met, u can very well leave your short position open (intraday or inter day), show patience, have confidence in your trading decision and enjoy the time decay.

Happy Trading.

Hi friends,

As every gentleman here knows the premium when a new session is about to start is always higher. Lets take example of 2700 put, it's March put is trading at 12 odd bucks whereas Aprils is over 50!

Now if I short sell it for more profits till price comes according to market, I was told we have to pay margins. But my friend who told this had no further idea. So anyone here reading this, please help and suggest the method.

Lets say I short selled 2700 put @ nifty 2810 of next month at 50 premium, now my friend said I have to give 140500 (margin) and 2500 as premium. Let's say (hypothetically) market stays at 2810 and put's premium goes down to 20 in 2nd week of April, how much I get return? (2810*50)+(50-20*50) or something different?

If nifty goes up and I short selled put will it be a profit by margins too? If nifty goes down in same case will it be loss of some margin amount? Help me understand this confusing stage. Might helpful for others too!

reagrds,

Arjun