18th May will be a day to remember. Lots of lessons learnt. I am staring at a loss of 120k in my options positons. Though long stock holdings have gone up.
Lessons Learnt: I will read this post every time I trade.
1) Before any critical event (Elections, Budget etc) never write options no matter how far out of the money they are.
2) Theta, Gamma, Delta and other theories go out of the window on days like this.
3) Never try predict the future.
4) Never try to beat the markets. You can beat it once,twice,thrice..but over the long haul you will get beaten.
Lessons Learnt: I will read this post every time I trade.
1) Before any critical event (Elections, Budget etc) never write options no matter how far out of the money they are.
2) Theta, Gamma, Delta and other theories go out of the window on days like this.
3) Never try predict the future.
4) Never try to beat the markets. You can beat it once,twice,thrice..but over the long haul you will get beaten.
The problem with your positions is that they were all naked positions. You were just not prepared for the worst case scenario. IMHO, writing options without buying protection in case of an individual trader is like gambling and not trading. There is nothing wrong with trading before the big events like budget, that is if one is trading and not gambling.
You should have bought 4100 calls or 4200 calls to limit the loss on your short calls. Those calls were available at dirt cheap prices on last Friday and could have protected you from the massive loss.
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