Can i be the first person to write an option at a particular strike?

For example, it is march expiry now in a particular stock but i want to write an april option but there is no liquidity. Can i do an arbitrary black scholes calulation and write an option and hope for a fill?

Well someone has to buy the option…

that’s not my question. I am asking if I see an option chain with no trades at a particular strike and no reference last sold price, can i write an option using B&S and hope for a fill or wait for market makers to come in

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Yes, can do it place a bid for buy or sell at any price you want within circuit limit,place an order and see ,is zerodha not allowing?

yes you can place a bid for it. until someone fills the bid - order will remain pending. and your margin will remain blocked

out of curiosity - why would you want to do that?
on the downside - it will be very hard to square off due to lack of liquidity (open interest)

Yes.

Are you a market marker?

Selling naked options is very risky. if you have to ask this question, you will get into trouble.

Learn more about options pricing.

you don’t need to use black Scholes , its a model to base your option price. nothing says you should use that formula. you should price your options such that you factor in all the risks you want to take and price the premium. if someone is willing to take the other side, you will get filled.

To do something like this , requires a lot of experience. I suggest you do not sell naked options as a beginner.

To write an option means to sell an option. The seller asks and not bids.

yes you are correct technically!

but understand when you sell some thing - the rates that are prepopulated are of the bid

and when you buy, the prepopulated rates are of ask

this logic is used so that orders are executed at market rates. i am talking from experience only

so when i sell an option, i look at the bid price/qty to know the liquidity and match it so i get fill

–
and if you are the first seller with no bid - you can ask :slight_smile:

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Hi I am an experienced trader please don’t assume stuff. I have several lots of underlying that are covered, hence i want to write a long dated covered call with no liquidity as of now.

I think you did not understand the question

You didn’t have to reply to me at all.

May be you need to write the question more clearly.