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SMI for Options Writers

Option writing requires good margin and is riskier than option buying. It can give slow but continuous returns when the market is non trending (using non directional trading strategies) or during low or decling IV conditions (both trending and non-trending strategies can be used as per rules of option writing)

Best conditions for option writing (either of these can be used):

  • Price is sandwitched between decision making markings (purple lines). Recommend to use non-directional credit strategies.
  • Textual information reads the expected range and price has not given breakout from this range. Recommend to use non-directional credit strategies.
  • Market is trending as per conditions mentioned in “Using SMI for option buying” but trader prefers to write option than buying. Put/call is selected for writing as per trend side. Trades can be hedged for high volatile conditions.
  • If you are not sure about the strike selection, prefer to trade outside the range of decision making markings or expected range + 2 ATR (14) for non-directional trading strategies conditions. For directional strategy, prefer to use strike of other side of decision making marking + 2 ATR (14) (indicative only).
  • Exit the trade if any of above mentioned condition for trade is interrupted.


Do not trade options if textual information reads “Abrupt indecisive moves expected” or “Info NA”