Hello Pannet1.. Initially I took options position on the view that NTPC would be range bound. And I booked my profit in those options 3-4 days back and currently I have no position in options.
You are right that I should buy Sep future and short Oct future. Initially I tried to do the same but due to very less liquidity in OCT series I was not able to do it. By the way in next month I automatically will be in buy and will carry my Sept shorts to Nov shorts.
You are right that I should buy Sep future and short Oct future. Initially I tried to do the same but due to very less liquidity in OCT series I was not able to do it. By the way in next month I automatically will be in buy and will carry my Sept shorts to Nov shorts.
this looks like a hedged position but actually its not. one future p/l sets off the other .. leaving both the options without a hedge .. so if the underlying moves past any of your option strike within few days ... of your entry ... you may have to incur loss.
if the range between the option strike price is wide then the premium is not high ... as they say risk is proportional to the reward.