Dear chaitanyagoa,
When market is going up with no. of days to expiry is away. Then, one could following startegy:
Buy at money or near money call and write OTM call.
For example:
Buy 2lots Nifty 4900 Call and write 5000 call Nov. series
But if you think up trend but not much steam is left or expiry is nearing. Then, one could go for following strategy:
Write an OTM call near resistence and write an OTM put near support.
For example:
Write Nifty 5200 Call 1 lot and Write Nifty 4600 put 2 lots Nov. series.
Will prefer last one because chances of constant move up is less and I can eeat the premiums.
Regards
When market is going up with no. of days to expiry is away. Then, one could following startegy:
Buy at money or near money call and write OTM call.
For example:
Buy 2lots Nifty 4900 Call and write 5000 call Nov. series
But if you think up trend but not much steam is left or expiry is nearing. Then, one could go for following strategy:
Write an OTM call near resistence and write an OTM put near support.
For example:
Write Nifty 5200 Call 1 lot and Write Nifty 4600 put 2 lots Nov. series.
Will prefer last one because chances of constant move up is less and I can eeat the premiums.
Regards
so...you prefer to write both 5200 call & 4600 put's.....is it both together or wait for market come to near resistance then write call 5200 when market come to support then write 4600 put....please clarify