Option Selling or Writing is a great way of generating regular monthly income and commonly used by professional traders. Option buyer pays premium which goes to the option writer. The call writer hopes that the stock price does not rise and the option premium falls to zero whereas Put writer hopes that the stock price rise so that put premium falls. The aim is to get the benefit of time decay in options. Reasons why people write options :
1. Earn regular income
2. Profit even when market is range-bound
3. Higher probability of earning profits
4. Create advanced option strategies
This video tutorial explains in detail how to short Call option and Put options. It also covers other topics related to options trading like profit & loss scenarios. Also, we have covered commonly asked questions about #options trading (FAQ)
If you have any doubts about this topic or any topic related to call or Put option or options trading in general please feel free to post your queries.
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DISCLAIMER : All contents herein are provided for illustrative, educational and informational purposes only and are not intended as recommendations to buy or sell. Any information provided herein shall not be construed as professional advice of any nature. Trading involves risks and it is advised that a certified financial analyst ought to be consulted before making any decisions
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