For example if i sell CE and PE of particular far Option where i think that price will stay in between this range and take the advantage of prenuim, Which does not have much liquid
Will i face any problem i am talking about stock & index option both
You can do that for index (nifty, banknifty)
If you do it on illiquid stocks, there won’t be any buyers to execute your far otm options.
Even if there’s a buyer, don’t risk it if market takes a V shape u turn, you will fall into trouble of physical delivery.
seeing the violent movements in the market(even nifty), it is not advisable to trade in illiquid options(that too if they’re monthly). If you want to make adjustments later the bid-ask spread may eat all the points you’ve made till now. You may opt for round numbers if you still want to sell very far OTM options. Like 38000,38500,39000 in banknifty, likewise in nifty too. Check the OI and volume of the option before selling it.
Stock options are a big NO for me.
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Exactly.
I’ll stick to nifty