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Why not to write options ?? What is the risk ??

 
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Author Why not to write options ?? What is the risk ??
krishnalko
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Joined: 27 Sep 2007
Posts: 16

Post: #1   PostPosted: Thu Jul 29, 2010 4:16 pm    Post subject: Why not to write options ?? What is the risk ?? Reply with quote

Dear Friends
Why one should not write stardles or strangles to take advantage of time decay.
I have seen that it normally decays and can fetch a decent money if written in the beginning of series.
Is really risk is so high that retail traders should never go for it ??
Normally retail traders keep burning their hands through buying options as it gives a fake feeling of limited loss.Truth is very few retail traders make money in buying options while on the other hands options writers take good advantage of time decay through writing.
Please note that I am not talking about naked CALL or PUT writing but starddle or strangle seem reasonably good tool to make money.
I have studied on above matter through paper trading for almost one year and in my knowledge area results are normally okay.
Please guide sir.
Warm regards
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gomsi02
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Joined: 11 Feb 2010
Posts: 34

Post: #2   PostPosted: Thu Jul 29, 2010 4:44 pm    Post subject: Reply with quote

Dear 1 long year of paper trading....your hard work is really true. In indian system U can get time & volatility in your pocket in writing.
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