Hi All,
I am researching options and have few queries and a strategy. Please comment.
Example: Nifty value today: 18th Jan 2015 is 8513. Lets take this example.
1. Suppose I sell 8000 PE 1 lot at 10. I get a premium of 25 X 10 = 250. Suppose I do this trade tomorrow.
Can I square this by buying 1 lot of 8000 PE if premium goes down?
My question is basically when I buy option, i can square by selling it at higher premium to make profits. Similarly it is possible to sell option at higher premium and square it by buying option at lower premium?
Now the strategy: Can I sell out of money option on expiry day and make premium as profit? Is not this a sure shot strategy?
Thank You!
I am researching options and have few queries and a strategy. Please comment.
Example: Nifty value today: 18th Jan 2015 is 8513. Lets take this example.
1. Suppose I sell 8000 PE 1 lot at 10. I get a premium of 25 X 10 = 250. Suppose I do this trade tomorrow.
Can I square this by buying 1 lot of 8000 PE if premium goes down?
My question is basically when I buy option, i can square by selling it at higher premium to make profits. Similarly it is possible to sell option at higher premium and square it by buying option at lower premium?
Now the strategy: Can I sell out of money option on expiry day and make premium as profit? Is not this a sure shot strategy?
Thank You!