Options Strategy - Selling Straddle of Put & Call

#1
Hello Traders,

I am not sure if this has been discussed earlier or already have related threads. Then would request to please point me to the link to read and post questions.

To be elaborative, I would like to know what are the good strategies or methodologies of selling a straddle of PUT & CALL at same or different strike price. How can I choose the right strike prize so that buying will be more beneficial? Also, Is the time value more important in case PE or CE? As I see most of the PEs are gone way below 50/30 rupees.

Please share your thoughts more on this type of strategy. The strategy can be psychological or technical or a combination of both. Thanks in advance.

-Vinnie.
 

AW10

Well-Known Member
#3
Vinnie, please visit Options subsection of TJ and scan the threads there.
There was a dedicated thread on straddle by Bandlab2. Infact, there was paper trading done for 2/3 months.

Feel free to raise your doubt/question on that thread..

Happy Trading
 
#4
Make sure that you study IV by heart. Once you understand Implied Volatility (IV), you ll have better chances of making less losses.(Mind you, I said less losses and not more profit.)

Options is completely a different ball game. Read through threads in Options forum and also, read AW10's comments to most of them.(He really knows it well.)
:thumb:
 

AW10

Well-Known Member
#5
Yogesh Bhai.. Bachhe logon ko yeh IV bol ke mat darao yaar. Bhaag jayenge..
Waise bhee option seems pretty complex to many starter, if they don't start it correctly.

Let him pickup the basics first.. IV/ Greeks etc can come at second step.

btw, thanks for compliment.

Happy Trading
 
#6
Please don't mind as i am just picking the funda of options , but here on a practical note just wanted to understand what should be a good options bet for the october series .

Experts pls suggest a simple yet affective strategy with Call Buy / Write with Put Buy / write for oct 09 which can help .
My belief is that too an emotional one that Nifty having reached 5000 will face resistance may go to 4900 - 4850 and then will again bounce back to 5200 may be till oct end .

Is this the right way of thinking and then wld like to plan a Put - Call strategy which provides me buffer as well as give me reasonable premium profit due to time decay . Hope this will be a good learning exercise .

Is the following right approach .
1> Defensive
Sell Call 5400 @ 19 ( As i think it will not reach 5400 Nifty in oct )
Sell Put 4700 @ 52 ( As i think it will not drop to 4700 Nifty in oct 2009 )

2 > Bit aggressive
Sell Call 5300 @ 34
Sell Put 4800 @ 76

But here in case the Nifty follows a trend in one direction i will lose money so what should be my right " write option " strategy for Oct no when the nifty is in ( 4950 - 5000) range ......

Thanks in advance as this is for my learning .
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