I've seen traders selling itm options which are trading exactly like futures.. Ex now nifty at 7000 and 7500 put is trading around 500. Do people do this rather than buying futures? If so then why selling itm puts instead of buying futures. If I'm particularly bullish, then is buying futures preferred to selling puts?
Generally futures come at premium and towards expiry future will converge to spot loosing the initial premium. If one short deep in the money puts then one can pocket the little extra premium.
But the margin required may be little more for deep in the money options and if one is particularly very bullish one can buy futures as it is easy to liquidate with tight spread and can ride the full upswing.
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