Option Writing on WebNotes

How to sell a call option on Zerodha Kite

Sun, 21 Jun 2026 00:00:00 +0000

Writing a call option means selling a contract you do not own, collecting the premium, and taking on the obligation to deliver the underlying at the strike price if the buyer exercises. On Zerodha Kite this is a sell-to-open order on the NFO segment, and it is one of the highest-risk trades a retail account can place. The writer’s gain is capped at the premium received; the loss on a naked (unhedged) short call is theoretically unlimited, because the spot price can rise without a ceiling.

How to sell a put option on Zerodha Kite

Sun, 21 Jun 2026 00:00:00 +0000

Writing a put option means selling a contract, collecting the premium, and taking on the obligation to buy the underlying at the strike price if the buyer exercises. On Zerodha Kite this is a sell-to-open order on the NFO segment. The writer’s gain is capped at the premium received; the loss is the strike minus the premium, realised in full only if the underlying falls to zero. That makes a short put a large but bounded risk, the structural difference from the unlimited risk of a naked short call .

Theta decay

Sun, 21 Jun 2026 00:00:00 +0000

Theta is the option Greek that measures how much premium an option loses for each calendar day that passes, holding the underlying price and implied volatility constant. It is the daily cost of time. Theta is negative for an option buyer, who watches the premium erode every day, and works in favour of an option writer, who collects that decay; the time value of an option falls to zero at expiry, and theta tracks the pace of that fall. The decay is not steady: it accelerates sharply in the final days of a contract.