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19-04-2024 09:11 AM | Source: PR Agency
Comment on Black swan event for Option Sellers as they run for cover by Shrey Jain, Founder & CEO, SAS Online
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Below the Comment on Black swan event for Option Sellers as they run for cover by Shrey Jain, Founder & CEO, SAS Online
Thursday being Nifty expiry lot of traders who write near to money Options hoping to profit from Options expiring worthless were in for a rude Shock as they saw their accounts see drawdowns of over 5% in a single day
Market tanked suddenly at 1:26pm and premium of ATM Put Options went up almost 10 times in a matter of seconds without giving traders opportunity to square off
No Stop losses be it Individual SL or strategy level SL's none of them proved to be useful as traders did not get an opportunity to square off as prices jumped.
Thursday saw traders experience LIVE what they work usually consider in theory to be max drawdown and use as simulation to build worst case scenarios. Think it's time for retrospection and going back to the drawing board to reconsider the risks of option selling specially plain vanilla expiry trading
Market tanked suddenly at 1:26pm and premium of ATM Put Options went up almost 10 times in a matter of seconds without giving traders opportunity to square off
No Stop losses be it Individual SL or strategy level SL's none of them proved to be useful as traders did not get an opportunity to square off as prices jumped.
Thursday saw traders experience LIVE what they work usually consider in theory to be max drawdown and use as simulation to build worst case scenarios. Think it's time for retrospection and going back to the drawing board to reconsider the risks of option selling specially plain vanilla expiry trading
Above views are of the author and not of the website kindly read disclaimer
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