In the last few years, the retail trading community in India has really found a love for options. They are volatile, you can double your money in a day if you get it right and you can buy a truckload of contracts in comparison to futures which require more margin. All great. Then why do most options traders lose money? Because there is a flipside to volatility and leverage. If you don’t have a trading strategy, you can hit the grounder sooner than you expect. Instead of designing a plan, many retail traders go for the jugular by taking a naked position by buying Out of the Money (OTM) Call and Put options hoping to make great returns. I’m not saying this is not viable. It can be, but to think of this approach as a great money-making formula is the long run is wrong.