The Two Common Trading Styles for Option Writing

8 min read
Insider Tips for Stock Market Success
  1. Longer Duration Option Selling – where positions are carried for longer duration lasting anywhere between a few days to months and even years in some instances. Note that it doesn’t relate to selling longer duration option but selling option with an intention of carrying the position longer than intraday.
  2. Intraday Option Selling – where positions are opened and squared-off towards the end of the session.
    While a lot has been said and written about longer duration option selling strategies, I mean pick up any book or blog post on option trading strategies and you would invariably find detailed coverage of longer duration option trading strategies. This is simply because of their unique characteristics such as theta decay, fixed lifetime and so on.

Note that it is imperative that you have enough buying power to take the position in future for minimizing your risk. If under any circumstances, you failed to take the futures position due to low buying power then close out your loss making trade immediately in the name of discipline instead of staying in the trade in the hope of reversal.

Share
Share on

3 thoughts on “The Two Common Trading Styles for Option Writing”

Leave a Comment

Your email address will not be published. Required fields are marked *