My friend is a very successful option writer and has very large capital, he told me if you want decent returns just write deep out of money options and there is nothing like unlimted risk in it?

General
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Your friend is wrong Nishant. If say Nifyt is presently at 8500 and you write Nifty 9000 calls for Rs 5. And assuming Nifty goes to 9500, you end up losing Rs 495 per nifty. The chances of making money writing deep OTM options are higher, but yeah you could make money 10 months in a row, and lose it all in 1 month when markets move sharply. But naked option writing has unlimited risk.

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Thanks,AstroGuru for good suggestion, but what if nifty goes down to 8300 after buying future of8400.

One idea i want to share with u n mr. Karthik, is that when nifty come at lvl of 8300 we sud buy 8350 call n wait which side nifty goes, if up no problem 8350 call protect our trade n if goes down we will book minor loss in 8350 call, pls both of you advise. Thanks.

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A clever options writing may reduce risks but cannot guarantee to avoid losses.

You need a solid strategy to make consistent profit and avoid losses in long run of trading profession.

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Positional strategy here:
http://intradaytradingsecrets.blogspot.in/2015/07/intraday-vs-positional-stock-trading.html

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Dear Nishant,
Please use proper tags while posting a question. A tag is a keyword related to the question you are posting. You are currently mentioning ‘b’ as the tags for your question. Please refrain from doing it.

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What’s your question dude? You are just making a statement. Why don’t you ask some proper questions?

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Soon some chat is about to be introduced along with PI. Good news for you, we all can chat in that.
Don’t litter the forum please.

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Nicely said @AastroGuru

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if this is chat , i think your mind get voveel!

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It is very true as i am doing it, but searching any mathod to protect from that loss, if
any one can suggest it. Thanks
k l agarwal

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@ K L agarwal
If you sell 8400 calls, and now nifty is 8250.
In case nifty goes close to 8400 or above, you try to hedge with buying futures in the ratio of your option’s beta. So if nifty goes to 8500 or 8600, the profits earned in futures should clearly offset the losses in your option.
If Nifty agan falls back to 8400 levels, you can close your futures with no profit or loss and take the benefit from the options you wrote.
Ask karthik for help and get a properly planned hedge ratio. I am not very good at that, right now.

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i would be grateful to you if you can let me know the role of option’s beta where i short only one lot. nifty is 7963 now and assuming we short the call with strike price 8100 @ 63.45. If nifty spot approaches 8100 then one nifty futures will be bought. will this apply when i short a put with strike price of 7700? Can I sell a nifty future when nifty spot approaches 7700. Infact I can simply place a stop loss order everyday to sell nifty future as and when nifty spot approaches 7700. Basically, I still feel that nifty has to move up and not any further down.

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Yeah, thats what I have written above. Instead of 8350 I have told to do the same with 8400. You have problem only if it crosses 8400, until that no need to buy futures.
If it shows a tendency to pull back sell off the futures with minorloss. ( I mean put a stop loss in place, while u purchase the future)