Futures or option selling?

General
1

With capital of 10 lakhs which instrument is more good to grow capital …
Futures or option selling ?

2 Likes
2

Definitely not futures coz the following reasons

  1. High brokerage

  2. Cannot handle market moves and no protection

  3. Heavy tax implications ( its calculated on the turnover in futures entire premium is treated as turnover )

  4. You cannot take multiple views in the same month

  5. Restricted to only 3 months including current.

1 Like
3

All dependent on your skills. If you are very good at getting the direction right then obviously it’s futures. High risk high reward. Even better is option buying. But you have to be that good.
With option selling you can make a max of 5 percent per month. That’s 50k for the capital you are considering.

4

:cold_face: :cold_face:. This much return I am not able to make even in my business.

5

Obviously it’s on the higher side.
I make around 2 to 2.5 percent per month. Am not that good. There are better traders out there.

6

He is just flexing his humble side. :muscle: Jason is one of the coolest player out there when it comes to make serious returns from the market while chilling.

7

i trade only directionally …
DIrection trade can be done by selling options as it has ptobablitie in sideways market too

8

That’s what I am saying. But if your are damn good at getting direction right then futures will give you better return than option selling. Even ITM option buying for that matter.
If you are not sure and want that benefit of premium decay then even option selling is fine. But as I said earlier you will have limited profit.

9

i have tried option buying and lost of money as selecting strike price in different momentum is impt in buying …
If levels are correct also and momentum not there cant make money …
So started with selling but only direction trades…
I.m not good in short strangle,straddle etc

10

Then you already know what you want man.
What’s the relevance of your original post?

11

jus wanted to know acc to capital futures trading is good or option selling in returns.

12

Futures is grave, don’t even touch that it will swallow you.
If you really understand what options are and how to play with it, then you can generate good money, conversely it will frustrate you.

13

if futures is a grave then what is option.buying :smile:

14

if you are confident you got the direction right then 1 lot of futures and 1 lot of ATM options will give you same results.(buy)

but with options your capital deployed will be comparatively lower, so your money will fetch you more leverage.

people dont usually get the direction right, thats where all the other strategies come useful.

15

Lottery ticket

16

Which is why i said

There are people who mint money by buying options also. its not writing alone generates money.

Futures i mentioned as grave because its more like stocks, if direction changes you are gone.

If you know how to play options, irrespective of trending, flat, directional etc you can win, even adjust the positions according to market conditions.

you have lot of OPTIONS in options. :grin:

1 Like
17

And no FUTURE with futures. :facepunch:

18

going naked into futures and options is fast way to get acc wiped. i would suggest hedged strategies or play covered call on stocks at ATH.

1 Like
19

But in option buying for fno stocks (Other than nifty 50 stocks), liquidity is a very big issue.
One can not blindly go for ITM and ATM option buying in place of futures.
Even some nifty 50 stocks have less liquidity in option buying. Futures have no issue / less issue when it comes to liquidity.

Correct me if I’m wrong.

20

none of the ATM strikes will have liquidity issue. ITM yes.

Go for ratio spreads, it will work with direction and also limit your max loss