Thursday, November 25, 2010

Option strategy


Our Agenda:
...........
We are primarily going to sell (write) call and put option only on nifty (and not on stocks).

We need to understand the following:
(1) Nifty spot Price: This is the NSE index value
For Eg: NSE Nifty Spot price is = 5000
(2) Strike price (Call and Put price) should be 5000
(3) Check the price of call and put. Either it should be equal + or minus 10 points and the total should be above 300.
(4) Per Lot means a pair of Call & Put Option

An illustration:

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