Options Position Close vs Expiry

F&O
1

Hello,

I’m a newbie trying to learn options trading. So far, I’ve been only buying naked calls and have made profit since the market is very bullish in the past few weeks. My questions:

  1. Is it usually a good strategy to recover all premiums spent on buying options by selling a corresponding option that are far OTM?
  2. The payoff posted in Sensibull - how accurate is it since the options prices are continuously changing?
  3. Is there a options analysis tool in Zerodha Pi?

Thanks,

2

  1. don’t think this will feasible strategy, i mean if you buy atm option at 100 to recover this premium you will have to sell 20 lots of deep otm strikes if they are priced at rs. 5, also rather than being long strategy this will turn into short strategy and if markets moves in direction of short strikes you will be in deep losses.

  2. Sensibull’s pay-off graph is reliable, the blue line changes regularly as it shows p/l for that day but the brown dotted line which shows pay-off on target date doesn’t vary.

no idea about this, maybe @ShubhS9 can tell you.

3

@XD4297 no, Pi does not have tools to analyse Options, you can use Sensibull instead, it has all the features a F&O trader would need.

As you are new to Options trading I’d also like to suggest you read Options module on Varsity, you will get to learn a lot more about Options.

2 Likes
4

I am also a newbie…
But the strategy you r tell about that is buying a long call and simultaneously selling an otm call at a higher strike price… This strategy is known as Bull call spread and it is mainly a strategy applied in moderately bullish market because your gains are limited as well as your net premium paid is also less… But in a strongly bullish market buying naked call option is more profitable…

:pray::pray::pray: