It looks like till mid-July NIFTY will remain range-bound between 8000 and 8500. Thus, I am planning to sell July 8000 CE and 8500 PE late next week for a premium of about 680 - 700 points and then cover the positions for about 550 points by 10-15 July.
pos_trader
According to the above post... i can see closing of the trade will be done middle of july month.
Max profit will be total premium - ( difference of stikes) = 200.
now the imp factor... when we sell anything .. we get max profit when its value comes to zero... and that max profit is 200 points...
Options value becomes zero only when expiry reaches...
in the middle of the month Options price will be high or not equal to zero...
i dont think middle of the month someone will sell options for cheaper price.. so that u can cover it....
If we closely watch the time period of this trade... then its life span is 45-50 days....
Avg range of 50 day time frame fits for this trade...
Only a senior practical option trader can explain this better than anyone...
i hope some senior will help ...:thumb: