Which options are best for writing? OTM, ATM or ITM options?

General
1

Which options are best for writing ? OTM, ATM or ITM options?

2

Writing options carries risk. Having known the risk, you can proceed to select the strike to write depending on your view of the underlying and volatility.

Also depends on your risk appetite. If you want lower risk, you can consider OTM options to write.

Again, it all depends on your view of the movement of underlying.

all the best.

3

Even though delta is lesser than ATM and ITM, it is bit safer to go for FAR OTM taking into consideration of theta. Writing option is more effective when the days left for expiry is one third of the particular expiry or nearer.

One has to thoroughly understand the risk involves in writing the option before opting for writing the same.

4

If you are a beginner, you should

  1. Try to buy options rather than writing it.

  2. If you have good grasp of options, OTM seems to fit you.

  3. If you are a well-versed trader, you would not have asked this question.

5

though writing options always evolve risk but take my example , my success ratio is 98% in writing OTM options , understand the market ,its not very difficult to understand the market ,once you take the grip of the factor which determine market no one stop you .

3 Likes