OTM put/call worth.

[mkandasa]

Hi Gurus,

I am a newbie to options. If a person buys an OTM PUT at the start of the month and if its premium increases in a week, Will he be able to find any buyers when he wants to sell it. Whether OTM buys are mainly used for hedging alone . Best example is Infosys in last week had its OTM put calls increasing by substantial percentage.

Will this be same for all the stocks/indices?

When should OTM call/puts should be bought?

 

[ananths]

Dont worry about buyers for OTM..there will always be buyers....but be careful in buying an option...Time decay hurts a lot..so its better to avoid buying options for beginners...Instead go for spreads...it may give you safe rewards...all the best!