It is always advisable for option sellers to trade necessarily with strict stop losses. Irrespective of whether you have sold a call option or a put option, it is always advisable to keep stop losses so that your capital can be protected. The stop loss can be set with reference to the market price of the stock or the price of the option.

Selling option is not only a cost in terms of potential losses but also in terms of SPAN margins, ELM margins and MTM margins. Remember, when you sell options, you are liable to pay margins exactly like a futures position. So if you sell a call option then there is an initial margin that will be calculated in the same way as the initial margin is calculated for futures. Of course, this margin gets adjusted for the premium receivable. Additionally, the seller of the option will also be liable to pay the MTM margins as well as any special volatility margins from time to time based on the market conditions. These costs need to be factored in when you sell options.