Big Move? No Problem – Sell CE and Let Theta Work!Hello Traders!
We’ve all seen those days when the market opens with a big gap-up or gives a strong rally – and most traders start panicking. But if you’ve been into option writing, you know that’s exactly when opportunity shows up.
High IV + inflated premiums = perfect setup to sell Calls (CE) and let Theta (time decay) do all the work for you.
Why this works so well after a big move:
CEs become expensive:
After a sharp rally, call options are overpriced. That’s your edge as a seller.
Theta kicks in fast:
If price starts to cool off or even just go sideways, the time decay starts eating the premium quickly.
Price usually settles down:
Markets don’t rally forever. After a big move, some pause or pullback is very common.
You don’t need to be 100% right:
Even if the price doesn’t fall, you still make money as long as it doesn’t fly through your strike.
Some ground rules for this strategy:
Sell Out-of-the-Money (OTM) Calls:
Pick a strike that’s at least 1–2% away from current price with decent premium.
Find nearby resistance:
Sell near technical resistance zones where price usually slows down.
Don’t sell into crashing IV:
Make sure IV is still high. If it's already falling, your edge is gone.
Always use a stop loss:
Set a level where you'll exit if the trade goes against you. Never hold naked without a plan.
Let’s Talk Real Example – Glenmark 2300 CE Sell
Check the chart above 👆
Glenmark gave a huge 10% gap-up and rallied up to 20% intraday . That’s a crazy move – and we know what that means: CEs were loaded with premium .
So around 11:15 AM (when the stock hit the top), we started selling the 2300 strike OTM CE .
What happened next?
Price went sideways. No breakout. But the premium kept falling hard. Even though price didn’t hit 2300, CE collapsed – pure Theta magic!
Rahul’s Tip
When premiums are juicy after a big move, you don’t need to do much. Just sell smart, manage your risk, and let Theta take care of the rest.
Final Thoughts:
CE selling isn’t about catching reversals. It’s about taking advantage of overpriced options and letting time work for you.
So next time the market gives a big rally, don’t chase it. Just chill, sell smart, and let Theta kill the premium!
Do you sell options after big moves too? Share your views or setups in comments!
