I follow a Stock options selling strategy — usually PUT selling for stocks NOT in my portfolio, but those that I like to include in it.
These will be usually two or three ticks away from the CMP. So that would make them just mildly OTM, NOT deeply OTM.
Of course if I feel or sense that the stock might make a bigger move downward, I may go a couple of ticks more out. I usually don't like to take or book a loss
So in case I am experiencing a bigger loss( say equal to or more than the premium received) I may choose to let the contract get assigned and take delivery by paying the entire contract value.
This situation is not as bad as it sounds in fact of I take delivery of the lot of shares that allows me to sell covered OTM calls along with selling OTM PUTS, ie Short Strangle strategy, increasing my chances of making sure profits.
According to me this is the safest(no risk of loss), the most consistently profit making strategy I hv found, that I regularly employ.
