How do options come into reality? If Stock holders sell options then How many options I can sell?

General
1

As there are many strike prices, Can the stock holder sell options for all the strike price and keep the premiums??

Thanks.

2

Yes, u can sell all the strike prices and can hold the premium

1 Like
3

That sounds very profitable.
If I buy a share at 100 , I assume if I add up all the strike price’s premium We get some 20.(correct me)
Now

  1. if the price goes up, the option buyers will exercise the Options and buy the shares at the strike price. This is obviously profitable.
  2. If the price falls down, We will be profitable till it reaches 80.
    Am I right?
    If I buy a PUT at Rs. 90 for Rs. 10, (So I have a right to sell the stock at 90 ) Then the trade becomes a no loss trade right?
    How does these things work? Whats the way for loss? :smiley:
4

Do not complicate, i have 300 stocks of icici bank at 260 rs, i sold one lot of jan 270 put for 5.50 rupeess one lot, now u himself calculate , how option writing behaves