InvestorQ : What are the 3 things I need to check when placing a sell options order?
Dia Deshpande made post

What are the 3 things I need to check when placing a sell options order?

Answer
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Ria Jain answered.
2 years ago


There are 3 key things to remember when you place sell orders for options; it could be calls or puts. Firstly, be very careful of which strike you are writing the call or put. The more out of the money you are the less the chance of losses on your short options. Of course, as you go more OTM, the profits will be lower but that is a call you need to take. Secondly, look at historic volatility of the stock as stocks with very high volatility are not suitable. Thirdly, keep a tab on the macros. If the macros are unstable; either domestically or globally, then it is best to avoid writing options as the price can really go against you.