Thanks for your reply Agilent but I would love this to be explained with an example. This is my thinking that people can make huge money by selling one month later calls (In today's scenario selling AUGUST CALL).
For example :
Currently Nifty is at 2993 and we have 7 trading sessions left for expiry.
Right now July 3100 CALL is at 22.50 and AUGUST 3100 CALL is at 81.
I have observed that prices are high for one month later but as soon as it comes as current month they comes to normal. So I am guessing if market remains around 3000 so post expiry or in the beginning of AUGUST this 3100 CALL should be of around 30 (as a general price when strike price is 100 more than the CMP).
Please correct me if Im wrong...Can we make money with this stretegy...What are the loop holes involved? Am I thinking in the right direction or am i missing something?
For example :
Currently Nifty is at 2993 and we have 7 trading sessions left for expiry.
Right now July 3100 CALL is at 22.50 and AUGUST 3100 CALL is at 81.
I have observed that prices are high for one month later but as soon as it comes as current month they comes to normal. So I am guessing if market remains around 3000 so post expiry or in the beginning of AUGUST this 3100 CALL should be of around 30 (as a general price when strike price is 100 more than the CMP).
Please correct me if Im wrong...Can we make money with this stretegy...What are the loop holes involved? Am I thinking in the right direction or am i missing something?