I have seen some f&o stocks with high iv. Can i short the some(not too deep) in the money calls and buy the stock futures expecting the stock to expire in a range which will help me to profit the premium is it profotable? Any thoughts would help.
Its same as selling puts.
Long future short call is same as selling put of the same strike.
So you get all pros and cons of selling puts.
1 Like
thanks for the reply.
my take is even if the ce value moves up with the underlying stock future at the time of expiration the ce value expires intrinsic so i can take the extrinsic value premium.
im only entering the trade for extrensic value of thestock.
i know if the stock price fall i get losses. is this worth a try or will i end up making loses.
You will only make money, in any trade setup, if you have, and stick, to your plan of action if the trade goes wrong. Same will be the case with covered calls.
1 Like
You will face losses if your trades are not executed well be any trade. You need to stick to your plan and follow it consistently for profitable trading.
It is very important to maintain discipline during trading. Stick to your plan always. Don’t get carried away by people’s thoughts. Stay true to your goal.