In today's episode, Apurva Sheth is in conversation with Praful Kulkarni, where he shares his expiry day option selling strategy. Praful begins by discussing how he got into the stock market. As a non-directional options trader on an intraday basis, he follows a logical option-selling strategy, mainly focusing on expiry days.
He explains why he chooses to sell options on expiry day. According to him, when many traders aggressively sell options, the premiums decrease, leaving minimal profits for sellers. That's why he advocates for a different strategy to navigate this situation.
He also says it's important for the premiums (the money you get for selling options) to be the same. Here's why:
1. Earning from Theta Decay: When the market moves slowly and steadily, the time decay of options (called theta decay) can make money for option sellers.
2. Avoiding Big Losses: Keeping the premiums equal helps in not losing too much when you check the current value of your options (mark-to-market positions).
Praful thinks it's a good idea to aim for equal premiums, and this approach is especially effective on expiry days because the time decay happens faster (Theta decay is accelerated).
We're certain that today’s and next week's episodes will improve your ability to know about Option Selling Strategy for Expiry Days in detail.
Timeline:
00:00 Introduction
01:57 About calisthenics
03:08 Praful Kulkarni's Journey
09:45 What is the reason behind trading on expiry days?
22:53 How can one benefit from your way of logical approach toward selling?
28:01 Highlight of today's episode
About Praful Kulkarni:
Praful Kulkarni is a mechanical engineer from NIT Surathkal. He is a full-time options
trader and the founder of @alphaleocapital3283 . He specializes in trading psychology and
short-term volatility trading. He is a fitness enthusiast. He is also a former bureaucrat.
About The Right Choices with Oracles of Dalal Street :
The Right Choices with Oracles of Dalal Street is hosted by Apurva Sheth. He is the Head of Market Perspectives & Research at Samco. He has more than 13 years of experience in financial markets. Our show focuses on curating actionable and insightful strategies from real-world stock market heroes. Our guests have been successful in markets and are willing to share their insights with you.
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