My Daily Options Trading Diary

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findvikas

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One more thing... u bought PE expecting nifty will go down.. at the same time u have sold CE which again suggests that u r expecting nifty to go down...
Then what is the difference? In fact u need more margin for selling a call so returns will be less.. So what is the reason for adopting the strategy?
Options loose value much faster when they are outside money... so 5000CE is outside money and will loose its value faster than 5000pe gaining..
 
Options loose value much faster when they are outside money... so 5000CE is outside money and will loose its value faster than 5000pe gaining..
Technical term: when CE is short, Time Decay = Profit.

Rajiv
 
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