Covered call?

[AW10]

Generally, you can get 5 to 8% of stock price as option premium so with this rate, if one has to write covered calls for atleast 12 to 20 months to get the original investment back.

In India, stock options have very poor liquidity so stock selection is important.

Happy Trading

 

[bandlab2]

theoritically yes, but its very difficlt to recover the entire price. take this as example

buy 1950 ifci stocks at 23. sell 25 call for 1.2. if ifci goes down to 20, your net loss is 1.8. now you sell 23 call at 1.4 next month. if ifci goes down to 17, then net loss is 1.6. now write 19 call at 1, if ifci goes up to 23, then your stocks are sold at 19, you get 1 rs premium. your net paper loss is 3 rs.

this strategy will work in range bound market. you can keep averaging stocks for every 15% downfall in stock

its good strategy overall, but pick fundamentally good and liquid stock. in this free all market i wont suggest this. let s find the bottom or see signs of recovery or consolidtion, then is the right time

 

[Capricorn]

Good points AW and bandlab. The only reason I am thinking of this is because I can't think of a better time to buy bluechips, most of them are down 50 % or more, for the longer term say about a couple of years. Thinking of spacing out my purchases over a few months.

Any suggestions on stocks sector wise would be most welcome.I think stocks with a beta close to 1 would bring in quite a decent premium.

 

[bandlab2]

capricorn,

I am not an expert in stock picking. but i would suggest a method to build your portolio. Let us you picked 5 stocks. A, B, C, D, E. Then do this

every monday buy A, every tuesday B, wednesday C, thrursday D, friday E.

repeat this until your folio is built. this is like SIP