Thread by @FinMedium

Currently Nifty calls are offering a return of 20.5% annualised!

Did you know even PPFAS mutual fund sells covered calls sometimes? 😉

We share some basic insights on how even small investors can earn extra money or protect their portfolio using options. Read below. 🧵

Covered Calls -
Amount needed: Nifty ETF worth 772500 (atleast)
When to use: When you think market is going sideway or slightly bullish. (Like current market)
Profit: premium received from selling call
Risk: Downward unlimited-Premium or No loss upwards.

Many people think hedging = buying puts, this is a very expensive strategy. How pros do it 👇

Collar:
Amount needed: Nifty ETF worth 772500
When to use: You think market is about to fall big time
Profit: Slight profit when market goes up or slight loss when market falls big

Want to earn extra interest on your cash while waiting to buy into the market again? Want to buy nifty at 15000?

Sell naked put at 15000 every month, by doing this you will get premium for selling the put. If nifty falls below 15000 you can buy at lower price.

Options are not a dangerous tool like futures! It's extremely mathematical and all the professionals use options.

This will help you in basic strategies that you should learn more deeply.