InvestorQ : If I do not want to buy a call option, can I sell a put option when I am bullish on the market?
F&O
Nisha Chandani made post

If I do not want to buy a call option, can I sell a put option when I am bullish on the market?

Answer
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2 years ago


This is not exactly a bullish strategy but it is more of an anti-bearish strategy. For example, if you are positive on a strong price support for HPCL due to its proposed merger with ONGC then what do you do? One way is to sell a lower put option on HPCL. Basically you are betting that HPCL will not fall below a certain price. You are not taking any view on the upside. Remember, this is an open position so if the price of HPCL falls sharply then your losses can be unlimited. You need to be conscious of the same.

Options are wonderful trading products; not just because losses are limited but also because they offer the facility to tweak and combine and create unique strategies for very specific outlooks and uses.