A Rule for OPTION Call Writing

28 Mei 2022

Making a good strategy help to be consistent in OPTION Writing
Here we will look some key point for Option Writing and the Rules .

1. Market runs in FEAR and GREED ,Make the most out of it for your trading
A stock which try to move up is very rare than most of the stocks try to fall badly
This is due to buyer and selling greed and Fear, When fear plays sell happens more than Buy
2. Make advantage of Falling Market or Sideways Market
Theta (Time) decay will help option trader to be write even if you take a wrong position
3. Identify a level beyond which the price will not move above or sideways move also ok

4. Fix the strike price which is reasonably above from current market price
Example : if a Current Market price is 1000 prefer Call side 1200 ,1300,1400 ,1500 strikes for CALL Short selling

5. Always Sell the Call on OTM (Out of the Money Range only)

6. Check the Volume and OI both must be having highest or better highest numbers ,this would help to avoid a situation where you have no buyers to cover you short CALL later

7. Check the BID and OFFER Price ,Place the Call Sell order by the OFFER Price or BID Price

8. Always choose the EXPIRY contracts which will have 40days time to get more premium price of the particular contracts.
if a expiry occurs in 10days avoid this month contract ,go for next month contract
#6 th point is due to this only ,volume matters for the trade, no volume then no trades
9. Always aim to short the CALL on the higher price
10. Do not average the CALL price often ,Set a average limit as 25% price move from the entry price

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