Discover and read the best of Twitter Threads about #expirytrading

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#Quora Question: How can 20X or 10x leverage for Option Selling be a risk If I follow Risk Management?
So this is about #Intraday #ExpiryTrading #OptionsTrading
This is inspired from traders with 70k+ followers. These traders and trainers recommend selling dirt cheap options. 1/n Image
These traders started trading in expiry weekly options when volatility was less. Now the volatility is extreme.
You are asked to follow a portfolio stoploss of 1% so I suppose that is fine.
You are asked to sell cheap options of #Nifty 1 -2 rupee and #BankNifty 5-6 rupee 2/n
You will sell in small lots so that is fine too. Consider this scenario.
On 26 September 2019 at around 10 am I sold cheap options of #BankNifty at ₹6/- only 20 lots which was i think 4 to 5% of my capital. What bad can happen. When I was putting stoploss at ₹15/- 3/n
Read 8 tweets
#Quora Question: Why do some people prefer not trading on expiry days?

Because there is no set by the books way to do expiry day trading. See my screenshot of Intraday Net Positions from yesterday. After brokerage, I made a loss of ₹35k. Thread coming. #BankNifty #Nifty 1/n Image
Retail participation through leverage has increased in Thursdays Expiry #OptionsTrading. Everybody cannot be a winner. One's gain is others loss. Hence market makers have made Thursdays #BankNifty move extremely volatile. It is normal for a ₹10 option to hit ₹200 & 0 again. 2/n
I have been trading options as bread and butter, despite the fact that OTM options goes to 0, I prefer not to indulge in Expiry trading. I have tried:
1. Selling Option with proper signal with SL almost always hitting 0. Probability because of Index Management and Volatility 3/n
Read 13 tweets
Don't get into #OptionsTrading with less than 25L if primary engine is #OptionSelling

Don't create focus on return in trades.

Read 20 tweets
A lot of chatter on my TL about the #edge in #OptionsTrading, specifically #OptionSelling.
A lot of good information but some mis-information being spread as well.

A #thread.
First off, #OptionSelling by itself is NOT an edge.

Simply by selling an instrument that decays in value over time, doesn't give one an edge towards profit. It is accompanied by short gamma and rising #volatility working "against" you.

The #volatility #edge or premium expresses itself when the underlying moves "less" than the move that is priced in the options.

Read 17 tweets

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