Put option writing

rkkarnani

Well-Known Member
#12
Any chance of your Posting a few charts of the set up? What software do you use ?
On second thought, let it be... no need for charts for me... dont think I have the stomach to "write naked options" whether its Put or Call! :p
Thanks for sharing a profitable strategy for benefit of others.
 

jamit_05

Well-Known Member
#13
On second thought, let it be... no need for charts for me... dont think I have the stomach to "write naked options" whether its Put or Call! :p
Thanks for sharing a profitable strategy for benefit of others.
Oh, don't be so serious about it... you can have your clothes on while you write 'em :)
 

comm4300

Well-Known Member
#15
writing put on index is ok. But what about writing puts on stocks...any event...for example stock like satyam...which plunged in a short period of time defying all the indicators (macd, rsi etc) to the oversold extremes.....

won't such event take away what you managed to make over a period of time...


i prefer spreads...just curious to know...how u manage naked ;)
 

anup

Well-Known Member
#16
I request Dan bro to comment on this... Whenever i see the word option my mind searches for Dan, Health Raj, OT and Ananth...

Will keep this strategy on watch list
 
#17
writing put on index is ok. But what about writing puts on stocks...any event...for example stock like satyam...which plunged in a short period of time defying all the indicators (macd, rsi etc) to the oversold extremes.....

won't such event take away what you managed to make over a period of time...


i prefer spreads...just curious to know...how u manage naked ;)
Hi comm4300,
Your concern is very genuine and i am very concerned on writing puts in stocks as India has very lenient corporate governance.I try to avoid puts on stocks as much as possible and as of now i write only in ICICI, HDFC bank, Reliance and in very small quantity.Mostly i write on NIFTY and occasionally BANKNIFTY.

I go for naked positions because i want to build a portfolio in the above stocks over a long period of time as i believe they gain in India growth story. Regarding NIFTY and BANKNIFTY i manage them by rolling over to next month whenever the markets plunge below my strike price.
 

comm4300

Well-Known Member
#18
great.

so, coming to Nifty...do you write ITM/ATM or OTMs

i understand that you use technical indicators for your decision making.

how about VIX

how far OTM do you go...and what sort of adjustments do you make, should you find yourself caught up on a really nasty fall.

thanks for answering so far...
 
#19
great.

so, coming to Nifty...do you write ITM/ATM or OTMs

i understand that you use technical indicators for your decision making.

how about VIX

how far OTM do you go...and what sort of adjustments do you make, should you find yourself caught up on a really nasty fall.

thanks for answering so far...
Hi Comm4300,

I use OTM / ATM depending on start of trend by using +DI/-DI crossover in ADX(14) and RSI (14).Implied volatility is also important in choosing OTM/ATM strike to justify the risk and i never write deep OTM , but i do write deep ITM during strong oversold downtrends to capture short covering rallies.

If i get caught i roll over the position to next month in good premium before expiry and wait for my time!
 

ananths

Well-Known Member
#20
friends...
IMO..its better to avoid just shorting options without any hedge.

I read somewhere in TJ itself...if you are writing options you earn like hen and when you lose....you will lose like an elephant going to toilet..

I have experienced it myself. So I want to warn people who want to short options.
Don't go for just shorting options in Calls or Puts...instead you can build a strategy using options..
Options shorting looks like a lucrative income generation strategy..but it will never work...believe me i have survived doing this for more than a year but when i lost it erased all my profits...im lucky that i saved my capital :thumb:

Edit :- Writing options looks like very easy method to earn money....but its not. Its the riskiest thing to do in stock market. Always see risk and reward when you trade.
 
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