So, I did a thing. I ventured into the thrilling (and slightly terrifying) world of options selling with low beta stocks. You know, the kind of trading where you’re just as likely to wake up with a heart attack as you are with a tidy profit?

😅 Yep, that’s the one. I decided to test the waters with some heavyweights like SBI Card, Tata Steel, Reliance, BEL, Dr. Reddy’s, Hindustan Unilever, ITC, and Tata Chemicals. Buckle up, because this journey is a mix of excitement, anxiety, and the occasional “Why did I do this?” moment 🎢.

Playing the High-Stakes Game: Betting Big on Options Selling with low beta stocks 🎲

Let’s get one thing straight – options selling with low beta stocks isn’t a game of Monopoly. It’s more like Jumanji. You’re either going to come out of it with a smile or, well, a lot less hair. Each lot I sold required a margin of around ₹70,000 to ₹80,000. That’s not pocket change 💰, folks! To even get in the game, I had to pledge my precious stocks on Zerodha. Now, if you’re thinking, “Hey, isn’t that kind of risky?” – congrats, you’re already ahead of me.

The Strategy: Leveraging My Stocks (Or How I Became My Own Bank) 🏦

Here’s where things get interesting. Zerodha lets you pledge your stocks to gain margin, which is like telling your bank, “Hey, hold onto my car keys while I take out this loan.”🚗 So, that’s what I did. I leveraged my existing stock portfolio, meaning I didn’t have to sell any of my beloved shares to play this game. Instead, I just handed them over temporarily, hoping they wouldn’t mind being collateral for a bit.

The Smart Play: Low Beta Stocks and Strategic Positioning🎯

But wait, there’s more! All(Most) of these stocks I chose for this experiment are low beta stocks. What does that mean? In simple terms, these stocks don’t swing around like a toddler on a sugar high.🍭 They’re relatively stable, which lowers the chances of a wild price movement that could ruin my day. And to make things even safer, I sold all these options at more than 2 standard deviations(+/-12%) away from the current price. This gives me a statistical 📊 probability of over 85% to achieve the gains I’m targeting. In the world of options selling with low beta stocks, that’s like wearing a helmet while riding a rollercoaster – you’re still in for a ride, but you’ve got some protection.

The Return of options settling with low beta stocks: A Modest 1.5% – I’ll Take It! 💵

Now, let’s talk returns. Each lot is expected to give me around 1.5% per month. I know, it doesn’t sound like much, but considering this is just a short-term experiment, I’m not complaining. These positions are set to close on the 28th of August, so until then, I’m holding my breath and hoping for the best. If all goes well, I’ll have a nice little profit to show for my trouble. If not… well, let’s not go there just yet.🤞

The Risks: When the Market Decides to Play Dirty⚠️

But here’s the kicker – options selling is like walking a tightrope over a pit of crocodiles. Sure, you might get across safely, but one wrong step and… snap! The market is unpredictable, and I’m fully aware that things can go south faster than a flock of birds in winter. All these stocks that I have invested in, are very low beta stocks. The amount of money on the line isn’t small, so while the potential reward is there, the risk is very real. That’s why I’m calling this an experiment – because, like all good experiments, there’s a chance it could blow up in my face.

The Waiting Game: Counting Down to August 28th⏳

As I inch closer to the 28th of August, I’m keeping a close eye on the market, ready to make any necessary moves. Will this experiment end in profit, or will it teach me a (very expensive) lesson? Only time will tell. But whatever happens, I’m already grateful for the experience – it’s taught me a lot about options selling, risk management, and the fine art of not panicking (too much).😅

Conclusion

So there you have it – my wild ride into the world of options selling. It’s been a mix of excitement, nerves, and a healthy dose of reality. By pledging my stocks and carefully selecting my positions, I’ve managed to dive into this high-risk, high-reward strategy. Whether this ends with a victory lap or a cautionary tale, I’m here for the ride.

Also checkout my analysis of JIO FINANCIAL SERVICES LIMITED.