Once again proved writing options is dangerous

Today's up circuit has caught many option writers on the wrong foot. Usually put writers get caught , when mkts would be dn , this time it is the call writers squeezed.

Plain buy/sell futures has its own risk. But this option writing should be handled with care, else - like today.

Option writing is NOT for small traders/ retailers. Institutions can do it, because it is NOT their money.

Once in a blue moon this happens. But most of the time (90+%) it is the option writer who wins.

What happen to those who don't have enough margin against the position & squaring position doesn't cover the value .... Is broker responsible to pay that additional money if his client refuse ... or exchange is at loss ?

Rajesh, Naked Option writing is Risky. That would have been proved today.
But real option writer know how to manage risk. So probably they had already bough protective OTM calls to safegaurd their position and limit losses to reasonable level.

It is not option writing that is risky, it is lack of KNOWLEDGE of how to manage risk with option is RISKY.

Happy Trading.

Those two words are always to be taken care whether it is cash/fo/options.
But the point here is, retailers/small traders are better off without these futures/option strategies.

Brother, the market always catches the majority on the wrong foot :lol:, no matter what segment you trade in. In fno the leverage multiplies the risk so do it only if you can afford it.

Another awesome post by AW10 :clapping: :clapping:

when v were small , a fear of ghost is carved in our minds which lasts till v die.....but frankly , has anyone seen how the ghost looks ?

"Of TRADERS in derivatives there is no one who is FOUND happy.....
If wealth flows in upon one, one may be perhaps luckier than one's neighbor, but still not happy."


still there r winners too in futures who r like ghosts.....never seen but still EXIST !!!!

Yup , ther sure are winners in futures, but as I have said the minority.

I DIFFER TOTALLY

1. Any person should NOT be in the stock markets, leave aside the F&O section, without knowing the market and the conditions that govern them.

2. 16th May was the day of counting for the Loksabha elections. Anyone and everyone knew that there would be a gap.... either a gap-up or a gap-down.

3. Anyone who has WRITTEN PUTS has NOT been punished. Such person is happy and has made a lot of money because of his own correct judgement of the market. Those who wrote Calls got punished due to their own poor judgement. So, it is untrue that option writing is dangerous.

4. Anyone, who stayed away from both the options, but instead sold Futures was equally punished. It would be idiotic to say that future selling is always punished.

Therefore, it was the wrong judgement that punished the traders and it is incorrect to put the blame on option writing.... My opinion and I could be wrong.

Cheers!
SS