What are your worst experiences as an options seller?
Not practiced as unhedged. Will suggest for positional, Protection is must and it also benefits in margin requirement. Increasing IV is a threat for option writer. Now a days huge margin requirement.
I trade by taking delivery of stock options on the selling side. Biggest drawback is being unable to set a correct stoploss in line with the script’s price action. Due to this, my RR ratio is very bad. However I find that Option selling in the last 2 weeks of the monthly expiry is a bit easier but by then the premiums available for safe OTM options are very low. Hence again a bad RR ratio comes into play.
In option selling R: R is not quite impressive but the PoP is good, that is, almost 66% most of the time.
So you can put monetary SL, Timing SL, or TSL.
@YdwxKCmiuL -Yes the Pop is 67% that is why I prefer safe OTM option selling. But the options are heavily manipulated such that the manipulated stock options don’t even decay just 3 days before expiry. So it’s difficult for a retail trader like me..
I tried setting monetary SL but following the script’s price action, support and resistance levels was more suitable. I think what’s necessary for me is to sell the options at the correct time with some confidence of my analysis. Most of the time my analysis is correct but I fail to trade..
Thank you for the suggestions.
I still remember that experience when
Fyers Web had shown 0 open positions but actually it had not closed intraday sold call options and carried them for the next day, causing a huge loss on the next day Nifty gap up.Later received a nice mail from @communications_team support - Sorry for inconvenience caused.
Hoping @tejas_khoday finds this confession interesting enough 
Second wave of corona wave is the worst experience for me as option seller because in April beginning 2021 as the Corona cases are increasing Bank Nifty Gapped Down 5% on that particular day I lost almost 15 % of my capital.
I stopped trading for almost two months because of that.
I think in the 2020 Corona Crash we had a hard stop to stop the system at 10% which it did and we closed all our position that the worst I can think
Honestly, I had many bad experiences as an option seller but never had the worst experience. As we always hedge our positions and have stopped loss in the system.
Otherone bad experience I think it NIIT Stock Option Where I had created a Bull Spread and the Buying leg became Deep ITM and I was not able to execute
No broker in India who will take up client trading risk brother. I had worst experience with aerodha many times on big days andthen moved to fyers. So far th ese guys are far better but let’s see in future.
No broker in India who will take up client trading risk brother. I had worst experience with aerodha many times on big days andthen moved to fyers. So far th ese guys are far better but let’s see in future.
15 percent in 1 day should be expected by option sellers. Only thing it should happen once in a while.. If it happens more than 2-3 times in a year, then you will become option buyer to recover your capital.
15 percent in 1 day should be expected by option sellers. Only thing it should happen once in a while.. If it happens more than 2-3 times in a year, then you will become option buyer to recover your capital.
Hi Vishal I was not trading during that time. I wish I was to know how the options premiums were. Is it true that big traders like PR Sunder and Jagen from youtube made lot of money because of overpriced options? Was it possible to do neutral strategies during that time because option prices were so overpriced?
Hi Vishal I was not trading during that time. I wish I was to know how the options premiums were. Is it true that big traders like PR Sunder and Jagen from youtube made lot of money because of overpriced options? Was it possible to do neutral strategies during that time because option prices were so overpriced?
Worst experience as an options seller?
Entered markets at 2014, until 2017 was just taking blind trades without any knowledge. I was becoming a friend with lot of traders across India especially from Tamil Nadu, Since I’m from Chennai. In that way, I was seriously following PR Sundar & IT-Jegan (IT-Jegan blog posts was trending those days). So, thought that traders from Tamil Nadu are doing options selling so let me also try that. And enthusiastically jumped into options selling in 2017 and lost few lakhs within a week. Below are the reasons.
- No idea about option greeks, india vix, max pain, PCR, FII&DII.
- I use to check highest OI in NSE website and use to take naked options selling, straddles and strangles since they are easily understandable to take trades rather than a spread, calendar or fly/condors.
- Zero knowledge about adjustments.
- No stoploss, I tell myself that I can exit if trade goes against me.
- My capital was vanished in just a week due to positional options selling. 90% of the trades were positional and due to gap up/down lost drastically.
Those were the days which made me to take markets seriously. Even now I use to take options selling trades very rarely using CPR indicator but still there is no soul when I sit in an options selling position. Whereas, when I buy options my soul gets attached towards my trades and I become super active.
Worst experience in option selling kills more than option buying.
When we lose a trade in options buying our loss is limited to premium. Either I win or lose.
But, when it comes to options selling to win or to avoid losing I need an additional factor called ***“ADJUSTMENTS”. ***I have met a lot of options sellers till now. One thing I found out from them is, you can sell options even if you have zero knowledge about option greeks but you have to be a champion in option adjustments based on india vix and OI data.
My recent worst experience as an option seller.
In Face2Face interview with Vivek Bajaj, I revealed an option selling strategy using CPR indicator. Entry/Exit/SL was clearly discussed in the session. But, personally whether my trades where in profit or in loss I was not bothered but I was trying a lot of adjustments in live market. Almost a year past but I was struggling in adjustments. Finally attended few sessions of Santhosh Pasi & Trendrooster Rajasekaran especially to learn the art of adjustments. But as I said earlier my soul was not getting attached towards option selling and I failed again and again in adjustments. Though my option selling trades ends up in profit, I try to convert into a no loss setup or I try to move the strikes or I try to maximize the profits in some way or the other and I mess up my entire position. So, finally understood option selling is not my cup of tea and Since, I’m profitable in options buying I started to scale up my positions and settled in.
My worst experience as an option seller is not about losing huge money or capital. According to me money lost in trading is not a primary concern (but not for everyone). For me: my mind, my body & my soul was not getting attached towards option selling which I feel as a bigger concern and that’s my worst experience or situation so far in options selling.
I would say only one. Stop loss not executed is the worst experience. It could be due to several factors like exchange technical problem or broker issues or anything that gets the SL order cancelled or rejected, and the price has moved so far than your defined/ digestible loss.
What percentage of your overall capital did you lose in that trade?