Make money by writing call & put options

[orderflow13]

This would benefit if Nifty is almost rangebound but if nifty falls to say 4100 than 4300 call will expire almost worthless giving a loss of about 200 - 50 (earned from selling current month nifty) = Rs-150 loss. Nevertheless this strategy could prove fruitful if Nifty remains in a tight range.

One more strategy could be to sell out of money puts and calls say if we want to play safe and believe nifty will remain between 3900 and 4700 or a much safer side when nifty is at 4300 ,we are taking almost 10% move on either side, though we may not earn much premium but we could be on a safer side, We sell Nifty 3900 put and Nifty 4700 call. Movement beyond both these figures will result in a loss.

nice point addition,that is the risk always remain,plus brokerage,once as u added , i was trapped in this situation,luckily market was falling in front of my eye( i mean not gap down by 150-200points)and when i saw chart i smell danger,n square of both position before expiry,stil i suffer a loss of 15 points per nifty + brokerage....and ur aather strategy is nice ,actually i already took such position in market,i explained it with graph on my thread,if interested have a look, i wrote 4500 call and 4200 put

 

[orderflow13]

sorry i forgot to add a link haha here it is
http://www.traderji.com/technical-analysis/23742-random-thoughts-technical-analysis-2.html

 

[jnj333]

One more strategy I found out recently is that Buy Call + sell Put is equivalent to buying the stock, the profits and losses are almost the same in both the condition.

Suppose We Buy IFCI at 45, our profit loss will be equal to the movement in IFCI, if IFCI is 40 then Rs.5 loss and if it is at 50 we have Rs.5 profit.

Now if we follow the above strategy we buy 45 call for 2.95 and sell 45 put for 2.95, we will pay nothing for the position except the margin for the short put. If IFCI is at 40 at expiry our loss will be Rs.5 (long Call will expire useless and short put will give loss) and if IFCI is at 50 our profit will be Rs.5 (short put will expire useless and profit from long call)so this option will behave just like a Long stock position but we may need only 20%(margin , depending upon broker to broker) amount rather than 100% as would be needed to buy that stock.

Could be a good strategy for people who want to buy the stock for very short term , say 15-20 days and their quantity planned to buy is equivalent to the lot size of its option.

 

[orderflow13]

One more strategy I found out recently is that Buy Call + sell Put is equivalent to buying the stock, the profits and losses are almost the same in both the condition.

Suppose We Buy IFCI at 45, our profit loss will be equal to the movement in IFCI, if IFCI is 40 then Rs.5 loss and if it is at 50 we have Rs.5 profit.

Now if we follow the above strategy we buy 45 call for 2.95 and sell 45 put for 2.95, we will pay nothing for the position except the margin for the short put. If IFCI is at 40 at expiry our loss will be Rs.5 (long Call will expire useless and short put will give loss) and if IFCI is at 50 our profit will be Rs.5 (short put will expire useless and profit from long call)so this option will behave just like a Long stock position but we may need only 20%(margin , depending upon broker to broker) amount rather than 100% as would be needed to buy that stock.
Could be a good strategy for people who want to buy the stock for very short term , say 15-20 days and their quantity planned to buy is equivalent to the lot size of its option.

thanks buddy,of course stock here also i suppose must be in tight range,guess our short put will add more losses if,it fall below 40, we need to have stop loss for this,but for short term is good, i tried buying call of next month( as all know its delta(time value) is less than this months ( ex. ifci at 45,i buy a call of strike 40 at 5, and sell this months call of ifci strike 45 at 2.95,my net debit 2rs which is my max loss and max prof. will be 3 rs if ifci close at 45 or above its same as cover call but instead of writin call against security, i will write against under lyings call.

 

[anjalidey786]

Hello to all members

I am new to this share market , i lost money in this market But i belive I can earn from option market. If any one can give me a good strategy in call and put option i will trade accordingly. or suggest me any site where i can learn this
thnks
anjali

 

[raviroyal]

good one but it will be more good if if we create our position in both sides

 

[jcravindra]

Great Articles. May or Mayn't cheer newbies like me. I will study this more in details before I really venture into this. But let me tell all of you that all ad visors are advising people like me not to venture into this. What is the true picture??? Can someone tell me.

 

[viharpatel]

Hey Great Article. Why this thread is closed? please discuss some good strategies Which gives good return by writing the options. I heard that above 85% options which are expired worthless so this is good bet i think. please suggest some good strategies friends.

Great Articles. May or Mayn't cheer newbies like me. I will study this more in details before I really venture into this. But let me tell all of you that all ad visors are advising people like me not to venture into this. What is the true picture??? Can someone tell me.

 

[viharpatel]

Please Any Body Share Some More Strategies In Writing The CALL_PUT Option.

Hey Great Article. Why this thread is closed? please discuss some good strategies Which gives good return by writing the options. I heard that above 85% options which are expired worthless so this is good bet i think. please suggest some good strategies friends.

 

[Parimal Devnath]

please give me a small suggestion and oblige:
four days before expiry i sell Nifty Put 5200 for a premium and on expiry Nifty closes at 5300. my Put is worthless. is this technically correct?
thanks
Parimal.