PE Writing vs CE Writing – Core Difference Explained!Hello Traders!
When it comes to Option Writing , many beginners jump into selling Calls (CE) and Puts (PE) without understanding the key differences. But PE Writing and CE Writing are not just two sides of the same coin — each comes with its own psychology, risk profile, and best-use scenario. Let’s break it down so you can write options like a pro.
What is CE Writing (Call Writing)?
Definition: Selling a Call Option (CE) means you're betting that the market will not go above a certain level by expiry.
Bias: It’s a bearish to neutral strategy. You profit if the market falls or stays flat.
Common Use Case: Ideal when the market is at resistance or when data shows strong supply zones or heavy CE OI buildup.
Risk Profile: Unlimited loss if market rallies sharply — hence better when combined with hedging.
What is PE Writing (Put Writing)?
Definition: Selling a Put Option (PE) means you're betting that the market will not go below a certain level.
Bias: It’s a bullish to neutral strategy. You profit if the market rises or remains sideways above the strike.
Common Use Case: Works best when market is near support or when strong Put OI build-up suggests buyers are defending levels.
Risk Profile: Unlimited loss if market crashes — especially dangerous during high-volatility or news-driven sessions.
PE Writing vs CE Writing – Key Differences
Sentiment: PE writing is bullish-biased, CE writing is bearish-biased.
Market Structure: PE writers want market to stay above their strike, CE writers want market to stay below theirs.
Risk Exposure: Both carry unlimited loss potential — proper SL and hedging are essential.
Expiry Day Behavior: CE premiums fall faster in strong downtrends; PE premiums decay faster in rising markets.
Rahul’s Tip
Don’t blindly sell PE or CE just because premiums are high. Use data like OI shifts, support/resistance, VIX, and structure to choose the right side.
Conclusion
Both PE Writing and CE Writing are powerful tools — if you know when and how to use them. Writing without context is gambling; writing with structure is strategy. Always trade with risk defined, bias clear, and exit planned.
Do you prefer PE or CE writing? Let me know your favorite setup in the comments!
