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1.
The logic behind this strategy is to wait and sell that leg of straddle/strangle first that is decaying fast.
Basically follow the trend.
2. If the market is going down, the CE leg will get executed. 3. If the market is going up, the PE leg will be executed. 4. If the market reverses the other leg is also executed.
Rakesh Jhunjhunwala has a portfolio of Rs 35,763 Crores which is still growing.
Since his passing, his portfolio has been managed by team at Rare Enterprises, headed by Utpal Sheth & Amit Goela.
Pre-requisites for the covered call strategy 1. You need to own a house. (Let's take #Nifty index for an example) 2. You need to own the complete house.
In our case, we need to own atleast 1 lot of Nifty.
How do we do that ? Read next
3. #Nifty is currently at ~18000 & it has a lot size of 50.
We need to own Nifty ETF worth 18000 * 50 = 9,00,000
Nifty Bees is the most liquid ETF & we get 90% amount after pledging as collateral margin.
So you get 8,00,000 back as collateral as well if you need more margin.