[Nitin Bhatia]

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Option Selling Strategy based on Volatility is more successful compared to any other option writing strategy. Volatility plays a very critical role in derivatives trading especially options trading. India VIX tells us about the annual volatility expected in the Nifty. We should consider the extreme trading range i.e. movement is possible on both sides.

Based on the annual volatility, we can find out the monthly, weekly, or daily volatility range of the nifty. The option writing strategy should be to write an option outside this range after taking a safe margin. You can decide whether you would like to sell an option on Put Side or Call Side with the help of Theta Option Greek.

The option contract with maximum theta % i.e. decay should be chosen for option writing. With the help of this Option Selling Strategy based on Volatility, an options trader can generate consistent returns safely. However, Option Selling can be very risky due to very high volatility. This option selling strategy is taught in some paid programs by charging hefty fees as it is highly profitable.

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