Trade with options data

[mayur_a14]

One of the favourite strategy is to write slightly deep OTM options and eat the premium when you have 2-3 days of trading left for the series.

Dear friend,
Can you explore What is deep OTM options ?
And how to earn premium?

 

[technofriends]

Dear friend,
Can you explore What is deep OTM options ?
And how to earn premium?

Hi Mayur

Deep OTM means options which are out of the money. The way options work is that you either pay or eat premium and speculate on the price movement of the underlying scrip. If you think that the price of a particular stock will go up you pay premium and buy call options. If you think the price will go down, then you buy put options.

In case if the strike price < spot price, then option is known as out of the money. Such options usually expire worthless on last day of the series. For example, next week you can go and write the call option of Apollo tyre strike price 90 and 95 assuming that the price will never touch 90. You will then be able to eat the premium for the lot and take home money.

However, if you are new to option trading, I don't advise writing options as the risk is unlimited and profit is limited.

 

[kiranjakka]

 

[kiranjakka]

 

[kiranjakka]

 

[kiranjakka]

please take positions according to trend of market if trend of nifty is down take short positions only if trend up take long positions only RELIANCE ALREADY DOWN 5RS SINCE POSTIED LOOKING AT 700

 

[timepass]

anything about nifty ??

 

[kiranjakka]

anything about nifty ??

will update as soon as i get clear direction on nifty

 

[prabhsingh]

Kiran,

It seems SBI can fall to 2050 as it seems Put accumulation is taking place at 2050 and even at 2000.What are your thoughts for SBI?

 

[kiranjakka]

Kiran,

It seems SBI can fall to 2050 as it seems Put accumulation is taking place at 2050 and even at 2000.What are your thoughts for SBI?

you may be right but this is not a best short i guess :thumb: