Thread by @krishstocks

As an option seller I always get this question,

Bro why you are saying start option selling with at least 10 lakhs, why not less capital

My simple answer everyone

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Let’s say if you Would have started option selling with 2 lakhs

In this case how many lots you are able to trade 1 lot on both sides, straddle or strangle

Let’s say you have made 3 percent return on monthly basis

Then your profit will be 6k

Fine but how about the brokerage and charges

Let’s assume as an intraday player your creating only one strategy with certain rules of targets and Stop loss

Both Entry and exit will take 4 orders

So let’s take Zerodha’s case

Daily 4 orders in to 20 = 80 rupees daily

80 in to 22 days of trading

80*22 = 1760

Roughly 1800 gone

Then what about other charges at least another 1500

Including STT, Exchange charges GST and clearing charges

Your return is gone down from 3% to 1 %

Means 2k left roughly

And still I haven’t added slippages

For entire month you have worked for 2k

Is it worth in this case

Absolutely not

Fine bro

I understood and realised

Let’s start with 5 lakhs

Let’s take this case

Same things you have to calculate

You might able to do double or triple the quantity mostly

Let’s assume here your brokerage will be same or may another 25% addition

Means 2500 brokerage roughly

Then you would have made 3%

It will come as 15k

Even if you have made 15k

Like last case you suppose to pay charges around 5k to 6k

Finally it became 10 k profits roughly

But one thing I don’t like

For the entire month you worked hard that money is not sufficient to run the show

And I have not included internet charges

Then half profits gone again

This is where lot of people fail to understand at micro level

And one more thing

You know people might say you can automate your strategy

Fine I have another issue here

I have to pay another 2k monthly for API access with zerodha

Fine bro what is the solution

And last thing I forgot to mention

Markets are unpredictable

We don’t know how much percentage of returns we are going make

That too on month on month consistently

Even with very well experience trader also not possible on every month

Final words

Even if you start with 10L

Capital it will take at 3 to 4 years build a sufficient capital

So don’t think on one side of the coin, always have look on other side of the coin

If you don’t have capital fine no issue

Save it ,

I hope everyone understood

Trading is also a job

Then save money from the job

Until you get sufficient capital

Then practice for at least 2 years

Then once you’re confident enough leave your job

Otherwise it’s very hard to survive

That’s why I am saying start at least with 20 - 25Lakhs

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#Nifty #banknifty #stocks #OptionsTrading

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