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.