The Obscure Trader

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Both are best in their own ways.


If we talk about option buying it suits in a trending market when the market gives bigger moves, most of the option contracts give us more than double triple return in a trending market if the entry and exit are perfect, the key is to predict whether market will be trending or not.


On the other hand option selling is preferred by most of the traders because options are designed for writing (selling) or hedging. Also option selling is best in a consolidated or range bound market because of its time decay property. 


For suppose if you short a call option at 9:15 AM when Nifty is trading at 18000 at the end of the day if the market is still around 18000 you will be in profit according to the strike price you choose, you will gain more points if you short ATM option as compared to ITM or OTM. It depends upon the moneyness of the strike price and the theta value of that particular option. The gain is also called the theta decay gain.


According to my experience I wait on expiry day till the time value of the options drop then I take trade with option buying because on the day of expiry the delta is near about 1.0 which means the option will move almost same points as the underlying asset will move, I prefer ITM option in this case.

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