@@IBBMIndia I have one doubt in your poor man covered call strategy, when u say that after every 500 fall reduce strike as per the profit earned , if market reverse than what is the consequences ??
There are many videos on covered call. But it is very well explained and a very effective strategy. This is rich and quality content by you. Really appreciate. Keep it good work. Always waited for your videos.
Thanks a lot for doing this video in English. Really waiting for English videos for long time. Your channel is really excellent and providing quality content, only thing am missing is my lack of understanding Hindi. Going forward please consider doing such English videos. Thanks again.
thanks for beautiful explanation as always ....sir my question is ..i bought reliance @ 2100 ..and it goes to 1900 , you said i shall sell ce of 2100 , would it not be ITM ce in that case ... pls explain
With Reliance spot at 1900, how 2100 ce will be ITM?. It will be 200 points OTM. On selling 2100 ce you would not get premium of 100 (as presumed by Sir in his explanation) but less than that.
yes you will get less premium, but you will keep getting premium. That is the base of the stat. You have to invest in stock which are range bound or in a uptrend. plz watch the video and rules again
Sir, when price goes ITM for Sold call, If we do not sell the underlying stock then broker is going to recover the loss from collateral by selling stocks. Is that correct understanding?
you have to keep additional margin for MTM, that is rule of the covered call, you can sell all our stocks on expiry to balance the MTM. But yes if MTM is high broker cannot sell you stocks but will square off your Call sold. the key to this problem is diversification and delta trading
Exllent sir, pls help me can buy these three/ four stocks for covered call stategy, BAJAJFIN, Hindustan unilever, hdfc bank, and Asian paint. And which is the best two out of this? Thanks.
Everybody talks about selling stock on expiry if price goes beyond strike price of call sold .. great learning .. not to sell .. and go on selling next month atm call
How to pay if there is loss in ce if market goesup because we are sell against the stock Iam not clear on this.I need to pay the broker the difference amount.thats shorted amount and closing amount is in loss???
Isme stock me sl bhi rkh skte? Q k agr long term k liye stock hi bear phase me chla gya to bht ghata hoga jse kuchh stock nifty 50 se penny stock me pahuch gye
Sir, Thanks. You are mentioning not to sell stocks even if they have risen on the expiry. Example, if I have bought the stocks at Rs 1000 and sold a CE of 1000. On expiry if the stock has risen up to 1500 the sold call will show a loss of Rs 500 and I have to sell the stocks to compensate it. Please advice
yes if the stock has risen so exorbitantly in one month then yes. if it is slow and gradual rise then no. plz register for free live monthly webinar for more clearance
If the stock price rises exorbitantly in one month can we hold the stock and sell next month ATM call and if the stock comes down in the next month can we sell the same strike price call even if we get less premium ??
What if after doing many covered calls my avg price for the stocks falls by 300 points. Can i then shift my ATM CE lower than the initial price of the stock?
Sir, Thank you so much for your reply I really appreciate your patience ..In the below question I mean to say when there is a big upside movement in one or two months and the reversal in next month we may get losses...over the long run I know it will be prfoitable.. I wanted to do with Asian paint using future, what do you suggest is it better to sell little OTM,
Also please confirm if i bought reliance industry share 2100 i have to short 2100 cal price. But if after 1 month if price comes down to rs 1700 then for next month i have to short 1700 call option or 2100 call option which is my buying price.
Sir , if stock price falls in given example if reliance industry comes to rs. 1700 can i buy more stocks for compounding and average out my buying price or my shares bought has to be same throughout 3 years. Which will be more beneficial
TQ sirji God bless , I am Vijay now slowly slowly I am watching all ur videos from latest to past , today I watched this coveredcall video , I have doubt : should I buy every mnth 10% price pe with coveredcall ? & another doubt is example if i bought ril at 2200 means I have to sell 2200ce ok,....if next mnth stock price is at 2100 means should I have to sell 2100ce (ATM) or every time I have to sell 2200ce (which stock price bought ?....pls reply sir
Can you please explain more on the stock selection - that’s where am needing some more details. Is that we choose stocks from Nifty50/Next50 which are trading near 200 EMA? Will that be a good strategy for stock selection? Any trick you have for this part. Also is that we need to sell ATM call every time? Not OTM?
Sir if the stock increases significantly in a month can we book Profit of our Portfolio stock on the monthly expiry day And Again buy full lot of same stock next day i.e 1st day of New Monthly Expiry??
Sir u mean that the CE Premium which is around 100 in the starting of the month becomes 0 & on Monthly Expiry day the premium of such call is trading in discount.??
It is ok if stock falls below the strike price .What happens if soptprice rises highly on expiry For eg.when bought price was 1860 of LT and atm was Rs 6 .the stock rose to 1940 incresing premium to 22 rs ,A loss of 16*300=4800rs In such case we have to sell the stock in our holdings Before we can take a fresh call writing we may have to sustain this loss as at expiry we have to reconcile
if it is a covered call then no matter how much it rises does not make a difference, you will only make a profit of premium received max, goes down do nothing but you can never sell a strike less then the price at which the stocks are bought. Download the IBBM app for more exciting learning & Strategies from google play store.
Sir , take the following scenario. you bought a stock at 2000 and sold next month ce 2000 at say 100 rs. On expiry stock goes to 2150 and ce 2000 becomes 150. so you square of ce2000 at 150 and sell next month's ce2150 at 120. Now on next expiry stock goes to 1950 and ce2150 premium becomes 0 which you may not square off. Now my question is at what strike I should sell call for next month, (1) ce2150 or (2)ce2000 ?
very nice, sir pls explain ATM ka delta to .5 hoga to bhi kya stock price upar jaane par ye ce ka price, spot price mai jitna increase hoga, us se neeche hi rahega. kyuki mai coverd call otm ce sell karke karta hoon.
Because it is covered call not delta trade, delta trade has the first rule as no ATM all OTM. Do not mix delta and covered call. This is the biggest reason y investor loose money.
Hi,Sudhansu Sir, If I want to do covered call with bankbees 2500 Quantity. So bankbees delta = 1. Then instead of selling 1 lot BANKNIFTY atm call Can I sell 2 lot BANKNIFTY atm call To hedge delta and shift call each and every rise of whatever primium I got from selling call. Because 2500 bank bees = 2 lot BANKNIFTY atm call Till delta manage. Please answer (Clarify) Sudhansu Sir.
sir i have idfcfirstbank, ashokleyland and tatamotors lot holdings, is it better to sell far OTM next month covered call or ATM CE? i am planning to sell premium for 1% profit
Thanks for beautiful strategy. Bought one lot of HCL Tech @968. Sold Jul 970 CE @ 19 and bought PE @ 1.6 Rs. After two days stock shoot upto 1040. I have 3 questions - 1. Is it advisable to close Jul option and sell Aug option now. 2. If not, at expiry day 3.15pm both above transactions to be done or Jul closing on Thursday 3.15pm and Aug option to be sold on Friday 9.30am, as there will be some change in stock price.
Whenever your sold call is ITM on expiry day, ensure that you square it off before the market closes. If not, your stocks might go in the auction where price may not be on your expected lines.
Suppose i bought some stock in 300 INR, sold ATM call @ 10 INR, Shares reached 325 in first month, so on call I will lost 15 INR. next month as per strategy i will sell again ATM call of 325 @ 10 INR, suppose share will fall again at 300 in next month so I will gain 10 INR on call, in net in two month I will loose 5 Rs and share price at same level. Am i right ?
@@IBBMIndia it is not impractical. Check ITC closing monthly level since feb. Closing level Feb - 203, March - 218, April 203, May - 217, June - 202. As i was thinking to apply it in ITC so i back tested on it since Jan 2021 and in net i have loss in backtesting till June month. But yaa exception are everywhere. I was thinking what we should do in this kind of situation.
@@aniceboy09 covered Call is not useful for ATM ,it must be OTM where we think ITC will not reach in a single month and if it reach you will be great profit.never use covered call stretegy when ITC below on your buy price .
@@hemant282 if price below your purchase price and you sold ATM CE then if price move to very high then your profit will be limited but you will be still in loss even price move in your direction. So better Buy FUT and sell ATM CE at starting. Now three possibilities will happen. Price will stay on same level or go high then stay on profit.if price fall then remove your FUT when it go below CE price.
Sir, what about margin requirements as per current SEBI rules if our stock becomes deep ITM. Also sir please explain current SEBI Margin Rules.. Thanks.
Sir Are you sure if we have scrips more than the lot size we dont need to block margins. I have 320 tcs shares in Zerodha .They say margin will be blocked even if one lot call option is sold or written. Is this acceptable. Kindly advise
I want to use this strategy in nifty bees. Now nifty spot price is 17625.nifty bees price is 190.nifty 17650CE price of jan month is 294. 1)Now my question is howmuch qty should i buy of nifty bees to start trade ? 2)How much qty should i sell of 17650CE ? 3) howmuch qty of to trade in banknifty bees and its CE ? Pls. advise me.
Sir! This is not quite so. Premium for Reliance ATM for CE is 47/- today not 100 Stock options are discouraged to keep till expiry by way of increasing margin after two weeks. I have one lot of reliance stock in my demat with Zerodha trading accounts but when I tried to do the covered call it’s asking for 90k margin despite having stocks in my account
Sir, please clarify these two points You said in your video that the margin for covered calls are stocks we hold, so how come Zerodha asking for 90k margin for reliance despite having stocks in demat account? Also as the the expiry approaches nearer, margins are increased heavily, so how can we hold the call till expiry?
Sir I have a querry , I hope I will be able to put my confusion in right words. As per ur strategy we shall sell the call @ at the money premium. Fair enough It gives good premium Suppose the stock falls from its current position , I sill own the stocks and get the AT THE MONEY PREMIUM. But in the next month if again repeat the same strategy where the stock price has gone lower than my purchase price and if I sell call and get premium in the second round and upon expiry I loose the holding of my stock if the stock gets marginally high. In that scenario I have gained premium at may be 4 percent 2 times but ended up giving my shares which were purchased at higher price in the first month to call buyer at a lower price.
no need to sell the stocks, Sell the next ATM ce that will become 0, if you do not sell the ce the only mindset that you need to make is that the profit of ce is hidden in your Stocks, and suppose the stock goes up the only thing that you have to start doing is start buying pe 10% down of CMP thats it. IF you know TA then it is a bigger hit and profit
Hi sudhanshu .. on last 2 days before expiry the margin requirement spikes up drastically ..what can be done in that case.. if the call is making loss? but I do have stocks in my dmat account but inspite of that zerodha asks for additional margin..
If I hold till expiry, additional margin upto 100% is needed on Thursday. 50% can be adjusted against margin pledge but 50% cash is required. Is there any alternative for this margin.
Understood the strategy but suppose in a month I sell ce 2100 of 100 rs premium. And if stock rises to 2300. I would be making profit of 200 rupees /share in stocks but wat about the loss in selling ce of 2100 ? Would I be selling my stocks to recover the loss ? Please guide me. I understand if price of stock falls or range bound below 2100 .. but wat about price rise above 2100..
No need sell the ce of 2300 if the stock comes back to 2100 you are still 0-0, further wait for your bonanza months. Follow TA support and resistance for stocks support
@@IBBMIndia Yes sir thank you for ur reply .. my question is hypothetical considering the worst case scenario. If at expiry share price stands at 2300rs and there is loss in ce , how would I cover the loss , by selling my stocks or from selling pe 10% of the price of ce
@@narayanvengurlekar520 ok this 1 month will be cost to cost, loss in ce same profit in stock, sq off ce in loss and sell next month atm ce, premium of this ce will some what compensate your loss in 1st ce, , Keep on doing for atleast 12 months Of course it need somewhat deep pocket, that is fine this is money market, the game of big money always wins
As on the day of expiry the ce or pe is always settled at the spot price. And you are doing covered call that is the total move of all is hedged by stocks in your portfolio. hence no VIX issue
Hi, your videos are so awesome, clear concepts. I have seen many of your videos and you dont leave even a single doubt for query. So no queries from my side :) Thank You.
Hi, e,g I buy at stock at 2100 sell CE ATM Rs.100 market moves to 2400 I will make a profit of Rs.100(300-200), next month I sell 2400ATM Rs.100 market reverse to 2100 I will lose Rs.200 (300-100) Net I will be in a loss of Rs.100 SO it's NOT A RISK-FREE. PE buy will not work out as for 10% premium you will get the strike of 15% OTM. Please advice
@@IBBMIndia Sir, Thank you so much for your reply I really appreciate your patience ..In the above question I mean to say when there is a big upside movement in one or two months and the reversal in next month we may get losses...
Thank you. I have one query. I understand that if the stock goes up we book loss in CE but the wealth is added in stocks. However, in next month if the stock again reverses and goes down , how to deal in such situation? We would have booked loss in CE as well as new loss in stocks. Is this a correct statement, or am I missing something here? Your reply shall be appreciated.
Very good explanation. My question is we deploy initially when stock is near or at support, but what subsequently. Do we continue to do covered call as long as stock is equal to or more than the bought price. In case it goes less, then we avoid. Is my understanding correct.?
Many thanks for excellent knowledge every one of your video provide. Each one of them is ream Gem. A small query, can we sell Reliance put current month and if it goes down then take delivery and apply your strategy instead of buying one lot in open mkt (this is just to start the strategy. Just one time trade to take delivery). Also advise when to cell call..is it on 1st trading day of the month are little earlier, means can we sell Aug month call...?? Kindly advise sir
Sir , your channel is giving some extra knowledge than others, Thanks a lot. One query is that Now a days, nifty have done a big rally. Is it OK to buy nifty bees at a higher price and do cover call or wait for correction ? Pls reply .
Video will be uploaded soon regarding this. Thank you very much. Please subscribe to our channel and press the bell icon for further updates. www.ibbm.co.in
Sir If I want to buy shares for long term and in staggered manner then Which price to consider ATM If market fell substantially then ATM at the time of buying will become far OTM then selling those calls will be feasible?
Its a rule, i understand hence I have also given a rule that you will donate 10% of the premium received in put buying , protecting against great sell. BUT YES THIS IS THE STAT. CHOOSE THE RIGHT STOCK AND THIS SITUATION WILL NOT COME.
sir, your every VDO is a treat for us- i started theta trading since last month and getting good profit- though i didnt wait till expiry [ exit with small profit each week]
THANKS A LOT FOR A GREAT KNOWLEDGE WHICH YOU HAVE GIVEN TO US, 🙏🙏, SIR PLZ SHARE A VIDEO REGARDING CASH SECURED PUT ALSO AND ITS A COMBINATION OF BOTH COVERED CALL & CASH SECURED PUT STRATEGY.
Sir, witnessed some great knowledge in your channel. Appreciate your gyana daan. Just 1 question sir. Would your PE buy hedge cover against all the losses, i.e change in premium of PE buy equals the change in premium of CE Sell?
If you are doing it niftybees, you can buy PE of December expiry in January every year. They are fairly liquid. You may feel that it's price is high. But treat this as an insurance against any crash/ Black swan event. Then keep selling ATM Call every week without bothering whether nifty is going up or down.
@@shreyasbhagwat8732 which strike price and what I understand we need to buy the put 11 month far , like we are in June 22 than we should buy pe of may 2023 if I am right what will be the strike price of put
Till now i have lot of confusion about covered call. Now all my queries got cleared with your crystal clear explanation. Thank you for this video.
Pleasure
Really wonderful teaching
Great
Thank you sir
pleasure and welcome
Eye opener .. everybody talks about selling otm call .. u r first to tell selling atm call.. thanks
Thank you
Today finally i understood covered call. Tq. Sudanshu 👌👌
Pleasure and welcome
Beautifully Narrated , really remarkable , Thank You
Thank you and welcome
@@IBBMIndia I have one doubt in your poor man covered call strategy, when u say that after every 500 fall reduce strike as per the profit earned , if market reverse than what is the consequences ??
Excellent clarity, Thanks , you have answered every query. Keep it up Sir.
Thanks and welcome
Nice video 👍👍
Thank you
There are many videos on covered call. But it is very well explained and a very effective strategy. This is rich and quality content by you. Really appreciate. Keep it good work. Always waited for your videos.
Thank you very much. Please subscribe to our channel and press the bell icon for further updates. www.ibbm.co.in
Pleasure and thank you
very well explained, thanks !
thank you and welcome
Thanks a lot for doing this video in English. Really waiting for English videos for long time.
Your channel is really excellent and providing quality content, only thing am missing is my lack of understanding Hindi. Going forward please consider doing such English videos. Thanks again.
Sure, thank you very much. Please subscribe to our channel and press the bell icon for further updates. www.ibbm.co.in
Excellent video.. I love it
Thank you very much!
Superb Video Sir once again.
Sir, if I am not wrong, your video on gamma scalping is deleted. Please re-upload the same if possible.
Thanks a lot.
Vl check
thanks for beautiful explanation as always ....sir my question is ..i bought reliance @ 2100 ..and it goes to 1900 , you said i shall sell ce of 2100 , would it not be ITM ce in that case ... pls explain
With Reliance spot at 1900, how 2100 ce will be ITM?. It will be 200 points OTM. On selling 2100 ce you would not get premium of 100 (as presumed by Sir in his explanation) but less than that.
yes you will get less premium, but you will keep getting premium. That is the base of the stat. You have to invest in stock which are range bound or in a uptrend. plz watch the video and rules again
@@IBBMIndia there could be situation when stock falls let's 1900 and stays below for 2 3 4 months and strike price will not fetch you enough premium?
@@bhuwanctripathi does'nt matter always sell 2100CE to accumulate premium.... One day your stocks will be free for you....👍
सुपर रेंटल टाइप इनकम।
Thnks
Thank you very much. Please subscribe to our channel and press the bell icon for further updates. www.ibbm.co.in
Excellent strategy
Thank you
Sir, when price goes ITM for Sold call, If we do not sell the underlying stock then broker is going to recover the loss from collateral by selling stocks. Is that correct understanding?
you have to keep additional margin for MTM, that is rule of the covered call, you can sell all our stocks on expiry to balance the MTM. But yes if MTM is high broker cannot sell you stocks but will square off your Call sold.
the key to this problem is diversification and delta trading
Exllent sir, pls help me can buy these three/ four stocks for covered call stategy, BAJAJFIN, Hindustan unilever, hdfc bank, and Asian paint. And which is the best two out of this? Thanks.
Asian & HDFC seem to be good picks for the same, you can give power & pharma sector a try for covered call
You need to sell weekly options or monthly options?
Covered call always monthly
Everybody talks about selling stock on expiry if price goes beyond strike price of call sold .. great learning .. not to sell .. and go on selling next month atm call
Thank you
Excellent example.
Thank you very much. Please subscribe to our channel and press the bell icon for further updates. www.ibbm.co.in
How to pay if there is loss in ce if market goesup because we are sell against the stock Iam not clear on this.I need to pay the broker the difference amount.thats shorted amount and closing amount is in loss???
No need just on expiry cover the call sell the stocks. and you are even
Super informative video
Thank you and welcome
Isme stock me sl bhi rkh skte? Q k agr long term k liye stock hi bear phase me chla gya to bht ghata hoga jse kuchh stock nifty 50 se penny stock me pahuch gye
try delta trading
@@IBBMIndia ok sir
Sir, Thanks. You are mentioning not to sell stocks even if they have risen on the expiry. Example, if I have bought the stocks at Rs 1000 and sold a CE of 1000. On expiry if the stock has risen up to 1500 the sold call will show a loss of Rs 500 and I have to sell the stocks to compensate it. Please advice
yes if the stock has risen so exorbitantly in one month then yes. if it is slow and gradual rise then no.
plz register for free live monthly webinar for more clearance
If the stock price rises exorbitantly in one month can we hold the stock and sell next month ATM call and if the stock comes down in the next month can we sell the same strike price call even if we get less premium ??
Theta calender sperd mai premium low hai only for 600 premium hai kis tarah trdade kare explaind
Theta in what, nifty or bank nifty, weekly or monthly stat plz elaborate
on expiry physical settlement takes place, will it affect the square off?
Square off the ce sold at 3:20 on expiry day if ITM else let it settle. Physical settlement only happens of Ce / Pe is ITM
Sir ji which type of stocks choose for covered call strategy?
which can be kept forever as a wealth
Thnk u sir ji ..
Can u suggest any stock?.. can we reached atleast 30% return by this strategy?
Thnk u surji...u give fully guidence...I will start my trading journey as u teach covered call strategy
Sir, Can you please suggest which share is for long term for coverd strategy
Find a stock which has recently bottomed out or fallen good
How do u trade delta neutral? Specifically the delta rebalancing part and it's timing?
As nifty moves 100 points against or in favour you can do delta balance
can i use in usdinr ?
NO
What if after doing many covered calls my avg price for the stocks falls by 300 points. Can i then shift my ATM CE lower than the initial price of the stock?
No you cant, you have stick to rules.. For that you must understand TA and support & resistance trading with trendlines
Very informative video
thank you
Sir, Thank you so much for your reply I really appreciate your patience ..In the below question I mean to say when there is a big upside movement in one or two months and the reversal in next month we may get losses...over the long run I know it will be prfoitable.. I wanted to do with Asian paint using future, what do you suggest is it better to sell little OTM,
No need, just follow rules. Choose your stock or stocks and follow
Also please confirm if i bought reliance industry share 2100 i have to short 2100 cal price. But if after 1 month if price comes down to rs 1700 then for next month i have to short 1700 call option or 2100 call option which is my buying price.
2100 ce you cannot sell a ce less then 2100 but you can sell ce higher then 2100 if reliance is trading > 2100
Sir , if stock price falls in given example if reliance industry comes to rs. 1700 can i buy more stocks for compounding and average out my buying price or my shares bought has to be same throughout 3 years. Which will be more beneficial
yes you can
TQ sirji God bless , I am Vijay now slowly slowly I am watching all ur videos from latest to past , today I watched this coveredcall video , I have doubt : should I buy every mnth 10% price pe with coveredcall ? & another doubt is example if i bought ril at 2200 means I have to sell 2200ce ok,....if next mnth stock price is at 2100 means should I have to sell 2100ce (ATM) or every time I have to sell 2200ce (which stock price bought ?....pls reply sir
no, lets say you sold a ce of 70 rs ATM, then you buy a pe of 7Rs that is 10% of premium rec in ce
@@IBBMIndia TQ sirji for replying
Can you please explain more on the stock selection - that’s where am needing some more details.
Is that we choose stocks from Nifty50/Next50 which are trading near 200 EMA? Will that be a good strategy for stock selection? Any trick you have for this part.
Also is that we need to sell ATM call every time? Not OTM?
vl plot a video on the topic ASAP
Sir if the stock increases significantly in a month can we book Profit of our Portfolio stock on the monthly expiry day
And Again buy full lot of same stock next day i.e 1st day of New Monthly Expiry??
yes you can if you see that all the theta of the call has become 0 and the ce is trading at a discount
Sir u mean that the CE Premium which is around 100 in the starting of the month becomes 0 & on Monthly Expiry day the premium of such call is trading in discount.??
It is ok if stock falls below the strike price .What happens if soptprice rises highly on expiry
For eg.when bought price was 1860 of LT and atm was Rs 6 .the stock rose to 1940 incresing premium to 22 rs ,A loss of 16*300=4800rs In such case we have to sell the stock in our holdings
Before we can take a fresh call writing we may have to sustain this loss as at expiry we have to reconcile
if it is a covered call then no matter how much it rises does not make a difference, you will only make a profit of premium received max, goes down do nothing but you can never sell a strike less then the price at which the stocks are bought.
Download the IBBM app for more exciting learning & Strategies from google play store.
How abt short put which mimicks cc.
It is not a mimic, covered call is a lot different
@@IBBMIndia cud u elaborate please
Sir , take the following scenario. you bought a stock at 2000 and sold next month ce 2000 at say 100 rs. On expiry stock goes to 2150 and ce 2000 becomes 150. so you square of ce2000 at 150 and sell next month's ce2150 at 120. Now on next expiry stock goes to 1950 and ce2150 premium becomes 0 which you may not square off. Now my question is at what strike I should sell call for next month, (1) ce2150 or (2)ce2000 ?
2000
very nice, sir pls explain ATM ka delta to .5 hoga to bhi kya stock price upar jaane par ye ce ka price, spot price mai jitna increase hoga, us se neeche hi rahega. kyuki mai coverd call otm ce sell karke karta hoon.
Because it is covered call not delta trade, delta trade has the first rule as no ATM all OTM. Do not mix delta and covered call. This is the biggest reason y investor loose money.
Hi,Sudhansu Sir,
If I want to do covered call with bankbees 2500 Quantity.
So bankbees delta = 1.
Then instead of selling 1 lot BANKNIFTY atm call
Can I sell 2 lot BANKNIFTY atm call
To hedge delta and shift call each and every rise of whatever primium I got from selling call.
Because 2500 bank bees = 2 lot BANKNIFTY atm call
Till delta manage.
Please answer (Clarify)
Sudhansu Sir.
no rules of delta do not apply to covered call. Delta trading is a different method with different rules
sir i have idfcfirstbank, ashokleyland and tatamotors lot holdings, is it better to sell far OTM next month covered call or ATM CE? i am planning to sell premium for 1% profit
Current month OTM, easy, if TGT is only 1%, then better go ahead with delta trade, it will wield better returns
Suppose the stock falls 10-15 percent or say more than the premium of ATM call sold , how to handle the this situation please
Do delta trading
Thanks for beautiful strategy. Bought one lot of HCL Tech @968. Sold Jul 970 CE @ 19 and bought PE @ 1.6 Rs. After two days stock shoot upto 1040. I have 3 questions -
1. Is it advisable to close Jul option and sell Aug option now.
2. If not, at expiry day 3.15pm both above transactions to be done or Jul closing on Thursday 3.15pm and Aug option to be sold on Friday 9.30am, as there will be some change in stock price.
1. no let it expire, no moves
2. yes
there were 2 questions :-)
@@IBBMIndia 2nd answer not clear. I have to close Jul CE on expiry Thursday but Aug CE to be sold on Thu 3.15pm or Friday 9.30am
@@IBBMIndia sir if I let it expire and call buyer demands delivery then ?
Of course I know it will be almost cost to cost or very minor loss
Whenever your sold call is ITM on expiry day, ensure that you square it off before the market closes. If not, your stocks might go in the auction where price may not be on your expected lines.
Suppose i bought some stock in 300 INR, sold ATM call @ 10 INR, Shares reached 325 in first month, so on call I will lost 15 INR. next month as per strategy i will sell again ATM call of 325 @ 10 INR, suppose share will fall again at 300 in next month so I will gain 10 INR on call, in net in two month I will loose 5 Rs and share price at same level. Am i right ?
yes, but very impractical concept, is it so possible, and further again sell. Rules are rules, follow rules and win
@@IBBMIndia it is not impractical. Check ITC closing monthly level since feb. Closing level Feb - 203, March - 218, April 203, May - 217, June - 202. As i was thinking to apply it in ITC so i back tested on it since Jan 2021 and in net i have loss in backtesting till June month. But yaa exception are everywhere. I was thinking what we should do in this kind of situation.
@@aniceboy09 covered Call is not useful for ATM ,it must be OTM where we think ITC will not reach in a single month and if it reach you will be great profit.never use covered call stretegy when ITC below on your buy price .
@@shantilalpatidar4591 why not , when below cost price . Plz explain
@@hemant282 if price below your purchase price and you sold ATM CE then if price move to very high then your profit will be limited but you will be still in loss even price move in your direction. So better Buy FUT and sell ATM CE at starting.
Now three possibilities will happen.
Price will stay on same level or go high then stay on profit.if price fall then remove your FUT when it go below CE price.
I have VOLTAS and TORENT POWER can I trade in this stocks?
Sure, but if prices are higher then buy price or equal to that
@@IBBMIndia thanks sir
What if the stocks goes down 10-20% ? Atm will not cover losses !
how can this be possible in PAT??
Sir in up trend CE mein loss hoga to uske liye extra money on hand rakhna padega bahot jyada stock badh gaya to kya kare?
Kya aissa hota, lets be practical, if you are choosing the right stock, and it is a nifty 50 stock I think what you are saying is next to impossible.
Sir, what about margin requirements as per current SEBI rules if our stock becomes deep ITM.
Also sir please explain current SEBI Margin Rules..
Thanks.
vl make a video
Stock agar buying price se bahot niche aa gaya aur lambe samay tak niche hi raha to kya kare?
Call sell karte rahiye, premium lete rahe, baaki, what you are asking know is a TA concept, further there is put for you to protect you
Sir
Are you sure if we have scrips more than the lot size we dont need to block margins.
I have 320 tcs shares in Zerodha .They say margin will be blocked even if one lot call option is sold or written.
Is this acceptable.
Kindly advise
pledge the shares and take margin on them, talk to your broker how to get margin on stocks as colletral
I want to use this strategy in nifty bees. Now nifty spot price is 17625.nifty bees price is 190.nifty 17650CE price of jan month is 294. 1)Now my question is howmuch qty should i buy of nifty bees to start trade ?
2)How much qty should i sell of 17650CE ?
3) howmuch qty of to trade in banknifty bees and its CE ?
Pls. advise me.
this is the strategy of covered call, you have to buy 5000 nifty bees in order to use this stat in nifty
Sir! This is not quite so.
Premium for Reliance ATM for CE is 47/- today not 100
Stock options are discouraged to keep till expiry by way of increasing margin after two weeks.
I have one lot of reliance stock in my demat with Zerodha trading accounts but when I tried to do the covered call it’s asking for 90k margin despite having stocks in my account
plz check at the beginning of the month, atleast 80 even in current VIX
@@IBBMIndia Thanks! Appreciate if you could please throw some light on expiry and margin related issues for stock options
@@ronaldmascarenhas2361 have you pledged your shares ? If yes then after 5 or 10% haircut the margin will be given in your account by the broker
Sir, please clarify these two points
You said in your video that the margin for covered calls are stocks we hold, so how come Zerodha asking for 90k margin for reliance despite having stocks in demat account?
Also as the the expiry approaches nearer, margins are increased heavily, so how can we hold the call till expiry?
Cant help with zerodha issue, ask them I want margin from stocks I hold what is the procedure
You may pledge your shares and get margin for trading in options.
However, you will have to unpledge them when you want to sell them.
Sir I have a querry , I hope I will be able to put my confusion in right words.
As per ur strategy we shall sell the call @ at the money premium.
Fair enough
It gives good premium
Suppose the stock falls from its current position , I sill own the stocks and get the AT THE MONEY PREMIUM.
But in the next month if again repeat the same strategy where the stock price has gone lower than my purchase price and if I sell call and get premium in the second round and upon expiry I loose the holding of my stock if the stock gets marginally high.
In that scenario I have gained premium at may be 4 percent 2 times but ended up giving my shares which were purchased at higher price in the first month to call buyer at a lower price.
no need to sell the stocks, Sell the next ATM ce that will become 0, if you do not sell the ce the only mindset that you need to make is that the profit of ce is hidden in your Stocks, and suppose the stock goes up the only thing that you have to start doing is start buying pe 10% down of CMP thats it. IF you know TA then it is a bigger hit and profit
sir, agar stock 4 se 5 din tak uptrend mai rahe to kya hume har baar uper ka ATM ce sell karna hai, ya ek baar trade lekar expiry tak wait karna hai
no, just sell and hold, no multiple sells, no buying selling
Nice and simple way of explanation. Thanks and keep up the good work which will help for beginners like me
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sir why not otm call in this we collect less premium so
then do delta trading, Y covered call
Hi sudhanshu .. on last 2 days before expiry the margin requirement spikes up drastically ..what can be done in that case.. if the call is making loss? but I do have stocks in my dmat account but inspite of that zerodha asks for additional margin..
buy a small ce deep OTM very deep otm, that will help you with that. but do not donate much amount to the same
If I hold till expiry, additional margin upto 100% is needed on Thursday. 50% can be adjusted against margin pledge but 50% cash is required. Is there any alternative for this margin.
Sqauare off a day before make that a rule and move to the next expiry
Understood the strategy but suppose in a month I sell ce 2100 of 100 rs premium. And if stock rises to 2300. I would be making profit of 200 rupees /share in stocks but wat about the loss in selling ce of 2100 ? Would I be selling my stocks to recover the loss ? Please guide me. I understand if price of stock falls or range bound below 2100 .. but wat about price rise above 2100..
No need sell the ce of 2300 if the stock comes back to 2100 you are still 0-0, further wait for your bonanza months. Follow TA support and resistance for stocks support
@@IBBMIndia Yes sir thank you for ur reply .. my question is hypothetical considering the worst case scenario. If at expiry share price stands at 2300rs and there is loss in ce , how would I cover the loss , by selling my stocks or from selling pe 10% of the price of ce
@@narayanvengurlekar520 ok this 1 month will be cost to cost, loss in ce same profit in stock, sq off ce in loss and sell next month atm ce, premium of this ce will some what compensate your loss in 1st ce,
, Keep on doing for atleast 12 months
Of course it need somewhat deep pocket, that is fine this is money market, the game of big money always wins
How risk of premium increase due to VIX will be mitigated
As on the day of expiry the ce or pe is always settled at the spot price. And you are doing covered call that is the total move of all is hedged by stocks in your portfolio. hence no VIX issue
What is the need to buy put call for even 10 Rs.
How are we incurring unlimited losses
if the stocks falls invariably, it is for that, mental peace is the game
Is Bandhan Bank a good candidate now for covered strategy?
yes, maintain a SL of closure below 278
इस stratagie से हम महीने का कितना % निकाल सकते हैं pls आन्सर
Hit and check
Sir can I apply this statagy nifty bees. Sell at the money call . Call delta equal bees can I buy this statagy working Sir
Not delta, it is no delta stat, buy total lot of nifty bees or bank bees and then trade covered call
wow that's great. what a concept... You always surprised me with your knowledge and wisdom about the market.
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Thank you and pleasure
Great Sir
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BEAUTIFULLY EXPLAINED SIR.. THANKS
Pleasure
Hi, your videos are so awesome, clear concepts. I have seen many of your videos and you dont leave even a single doubt for query. So no queries from my side :) Thank You.
Thank you so much. Keep learning & growing!
Sir please upload reverse calendar next video 🙏 adjustment & rules
Sure will soon
@@IBBMIndia Thank you Sir 🙏
very nice presentation sir. Thanks for sharing the details on covered calls. Srinivas
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Hi, e,g I buy at stock at 2100 sell CE ATM Rs.100 market moves to 2400 I will make a profit of Rs.100(300-200), next month I sell 2400ATM Rs.100 market reverse to 2100 I will lose Rs.200 (300-100) Net I will be in a loss of Rs.100 SO it's NOT A RISK-FREE. PE buy will not work out as for 10% premium you will get the strike of 15% OTM. Please advice
Covered call does not follow such rules, it is a hit and leave strategy. You do not do trading in this. Do not micks trading with a strategy.
@@IBBMIndia Sir, Thank you so much for your reply I really appreciate your patience ..In the above question I mean to say when there is a big upside movement in one or two months and the reversal in next month we may get losses...
Sir , you give always good strategy, thanks,god bless you
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Very well explained. I came across your channel by accident and really liked the content. Keep up the good work.
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Thank you. I have one query. I understand that if the stock goes up we book loss in CE but the wealth is added in stocks. However, in next month if the stock again reverses and goes down , how to deal in such situation? We would have booked loss in CE as well as new loss in stocks. Is this a correct statement, or am I missing something here? Your reply shall be appreciated.
Very good explanation. My question is we deploy initially when stock is near or at support, but what subsequently. Do we continue to do covered call as long as stock is equal to or more than the bought price. In case it goes less, then we avoid. Is my understanding correct.?
Keep selling, if it goes down, just you cannot sell a strike of a ce which is less then the buy price of the stock
Many thanks for excellent knowledge every one of your video provide. Each one of them is ream Gem. A small query, can we sell Reliance put current month and if it goes down then take delivery and apply your strategy instead of buying one lot in open mkt (this is just to start the strategy. Just one time trade to take delivery). Also advise when to cell call..is it on 1st trading day of the month are little earlier, means can we sell Aug month call...?? Kindly advise sir
I will post a upgraded stat to sell puts, once you understand the whole stat of calendar. wait for some time
@@IBBMIndia OK, Thank you sir
@@IBBMIndia yes sir plz make the video
Sir covered call hindi pe video banayie
sure, will make soon
Beautifully explained. My Question is when to Apply this strategy i mean on Expiry day or next day.
Next day to main expiry
Very very good , sir please hindi me bhi
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Sir , your channel is giving some extra knowledge than others, Thanks a lot.
One query is that Now a days, nifty have done a big rally. Is it OK to buy nifty bees at a higher price and do cover call or wait for correction ? Pls reply .
upto you, decide on your own mental peace
@@IBBMIndia Thanks Sir
Sir how to create banknifty no loss option stregedy
limited loss, limited profit, nothing like that
Sir, 50 k to ki strategy btaye, ina investment Nahi h begginers ka
Don't worry join this with this WhatsApp free 100) +% great start..
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@@scmjaim8856 sir kaun sa what's up number h
Zerodha doed not allow using shares as collaterals while writing call options.
The margin in any case is blocked.
no you can pledge the shares and take the margin, exchange has just changed the rules, talk to your broker for the same
Thanks sir
Pleasure
Sir
If I want to buy shares for long term and in staggered manner then
Which price to consider ATM
If market fell substantially then ATM at the time of buying will become far OTM then selling those calls will be feasible?
Its a rule, i understand hence I have also given a rule that you will donate 10% of the premium received in put buying , protecting against great sell. BUT YES THIS IS THE STAT. CHOOSE THE RIGHT STOCK AND THIS SITUATION WILL NOT COME.
Thank you sir
Whether next month trade would be at current ATM price
sir, your every VDO is a treat for us- i started theta trading since last month and getting good profit- though i didnt wait till expiry [ exit with small profit each week]
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Thats ok, just follow rules.
@nilesh can you please guide me
Sir plz bring this strategy at 14:40
Sure will try, but the trouble is, making that video at that time is the tough part but will still try
THANKS A LOT FOR A GREAT KNOWLEDGE WHICH YOU HAVE GIVEN TO US, 🙏🙏, SIR PLZ SHARE A VIDEO REGARDING CASH SECURED PUT ALSO AND ITS A COMBINATION OF BOTH COVERED CALL & CASH SECURED PUT STRATEGY.
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lovely
thank you
Sir, witnessed some great knowledge in your channel. Appreciate your gyana daan. Just 1 question sir. Would your PE buy hedge cover against all the losses, i.e change in premium of PE buy equals the change in premium of CE Sell?
No, it is just for abrupt falls and events. genuinely PE buy has no relation with covered call. it is just to protect anyone from a abrupt event.
If you are doing it niftybees, you can buy PE of December expiry in January every year. They are fairly liquid. You may feel that it's price is high. But treat this as an insurance against any crash/ Black swan event. Then keep selling ATM Call every week without bothering whether nifty is going up or down.
@@shreyasbhagwat8732 which strike price and what I understand we need to buy the put 11 month far , like we are in June 22 than we should buy pe of may 2023 if I am right what will be the strike price of put
Perfect learning 👍
Thank you
Covered call ki video hindi me chahiye sir please.....
Sure will make the same asap
Hi sirr please please hindi me bthavo sir please tanks sir in advance
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sorry ...it would be otm and understood ....my apology
Its ATM always, its covered call not delta trade
Sir please Hindi mai Banya karo video
Sure will make this video in hindi also
❣️🌟🔥
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