In the world of trading, “option selling” is often considered a game of the pros. It’s seen as risky, complex, and requiring large capital. But is it really? According to market expert Sanjay Kathuria, beginners too can benefit from option selling with proper strategy, discipline, and minimal capital. In this article, we break down the basics of option selling, introduce a low capital strategy, and offer a live demo-style explanation to get you started with confidence.
🔍 What is Option Selling?
Option selling, or “writing options,” involves selling call or put options to earn a premium from the buyer. Unlike option buyers who have limited risk and unlimited profit potential, sellers earn upfront premiums but carry higher risk.
-
Call Option Selling: You sell a call when you believe the stock/index won’t go above a certain level.
-
Put Option Selling: You sell a put when you believe the stock/index won’t fall below a certain level.
Your profit is limited to the premium received, but if the trade goes against you, losses can be significant—hence the importance of a hedged, disciplined approach.
💼 Why Option Selling for Beginners?
Sanjay Kathuria argues that option selling can actually be safer and more consistent than buying options—if done correctly. Here’s why:
-
✅ Higher probability of profit (you win if the market stays flat or moves modestly)
-
✅ Time decay works in your favor (Theta positive strategy)
-
✅ Ideal for range-bound or sideways markets
-
✅ Works even with low capital using hedge-based strategies
💡 Low Capital Strategy for Option Selling (Capital: ₹25,000–₹30,000)
Here’s a simple, beginner-friendly strategy demonstrated by Sanjay Kathuria that limits risk and works with smaller capital:
Strategy Name: Bull Put Spread (NIFTY)
Market View: Mildly bullish or sideways
Capital Needed: Approx ₹25,000–₹30,000
Lot Size (NIFTY): 50
🔧 Setup:
-
Sell 1 Lot of NIFTY 22500 PE (Put Option) – Receive premium (e.g., ₹80)
-
Buy 1 Lot of NIFTY 22300 PE (Put Option) – Pay premium (e.g., ₹40)
Net Premium Received: ₹40 × 50 = ₹2,000
Maximum Risk: ₹200 × 50 = ₹10,000
Maximum Reward: ₹2,000
Probability of Profit: High if NIFTY stays above 22500
This is a defined-risk, defined-reward trade. The risk is known in advance and can be covered with your initial capital. You’re essentially betting that NIFTY will not fall sharply before expiry.
🖥 Live Demo-Style Breakdown (As Shown by Sanjay Kathuria)
Let’s walk through a sample trade in live market conditions as Sanjay Kathuria typically demonstrates:
-
Open Your Broker Terminal (Zerodha, Upstox, etc.)
-
Search for NIFTY Options expiring this Thursday.
-
Identify a support level using simple indicators (SMA, RSI).
-
Sell a Put Option slightly below the support.
-
Buy a lower strike Put to hedge the position.
-
Confirm premium, margin used (~₹25,000), and max risk.
-
Place the trade and monitor the breakeven.
📌 Pro Tip from Sanjay: “Always hedge your option selling. Never go naked as a beginner, even if premiums look tempting.”
📊 Risk Management & Adjustments
-
Stop-loss: Pre-define your loss (e.g., 50% of premium)
-
Exit Early: If 70–80% of profit is achieved before expiry
-
Avoid Events: Skip trading before major news (RBI, Fed decisions)
📘 Key Terms to Understand
| Term | Meaning |
|---|---|
| Premium | Price received when you sell an option |
| Strike Price | Level at which the option is exercised |
| Theta | Time decay benefit for sellers |
| Margin | Capital blocked to take the position |
| Breakeven | Point where profit = 0 |
🙋 Common Questions by Beginners
Q. Can I do option selling with ₹10,000?
A. It’s not advisable without hedging. Start with at least ₹25,000 for safer spread strategies.
Q. Is option selling risky?
A. Yes, but with proper hedging and risk management, risk is limited and controlled.
Q. How much can I earn?
A. Even 3–5% monthly is achievable with discipline, which compounds over time.
🎯 Conclusion by Sanjay Kathuria
“Option selling is a powerful tool for consistent income if done with discipline and protection. Beginners shouldn’t fear it—they should respect it.”
With strategies like bull put spreads, defined loss iron condors, and proper technical levels, you can build a sustainable income stream with low capital. The key lies not in prediction, but in position sizing, patience, and protection.
📌 Next Step: Try the bull put spread in paper trading first. When confident, go live with small capital. Watch Sanjay Kathuria’s detailed video guides for walkthroughs.
