Buying the underlying instead of writing csp (in this example, an index, which only went up without ever touching the strike price of the put)
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To add, if you want to buy a stock badly
Sell ATM puts, or even ITM puts – pocket the premium and maybe even the stock
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Is this a covered call? If yes, then do you use Fut or niftybees to cover it?
Classic mechanical wheeling.
Forgot your name, can you say or share anything?
For now using futures to cover it with 17400call. If we go down further then I will close futures and buy bees.
Buying bees, making honey, giving a sample to clients
Basically if you want to buy a particular security but the current price seems a little expensive and rather than waiting for it to come down, you sell 1 lot put option but without leverage i.e. the lot size of nifty option is 50 and current value of nifty is 17000, so only sell 1 put option contract if you want to buy niftybees worth of 8,50,000. Otherwise it’s a leveragrd trade and is risky.
Mainly people do cash secured puts to generate income in good stocks and indices until they fall to their desired level.
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How many lots of puts you sell with a capital of 1 cr?
I think it depends on the instrument you are buying, expiry and premium
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He said he do it primarily in indexes, nifty premiums for far otm options are not much, 20% per annum is possible with some active managing provided a crash doesn’t happen, and if it does losses will be equivalent to if you had invested in nifty.
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It depends on my existing positions. If I am not having any other ITM positions then max I would sell is 200qty of nifty put.