U need to be really good at ur TA and need to have read pulse of the market very well.Also its about timing the market,which is very tough,but possible.
understanding Options,its highly profitable.Theorywise,an option writer has limited upside but unlimited downside.Best way is to square off ur option with 10%(leavin aside brokerage).Also in a trending market(bull or bear)try buyin 100 points out of the money options.Ppl use it well as a hedging mechanism.Sometimes they use futures to hedge options also.
Also important is index options are European(ie excercisable only on date of expiry and if in the money)and Stock Options are American(excersable on any date b4 expiry,if in the money).A thumb rule to get an idea of ur profit will be add the premium to ur option strike price(in case of calls)and subtract the premium(in case of puts)Of course i am implying that ur buying options.
Always remember
Option profit is directly proportional to time.As time decreases ur profit decreases and vice versa.
Option Profit is also directly proportional to whether its in the money,out of money.
It never depends on one of above factor only.Both of them count.