Dear Friends,
It is my humble duty to sound a note of caution regarding any activity we engage in.
So, here are a few words about options trading:
This is a cautionary post for all my friends who are already involved in options trading or are planning to start the options trading.
I request all those who are already making a profit to skip this advice of article.
The reason for this warning is simply to ensure that those with no prior knowledge do not jump in and lose their money. No matter what I write here, you will likely do what you intend to do anyway; still, it is my duty to speak up about this.
How does options trading attract everyone?
It sows the belief that one can make money quickly.
The desire to see one's investment quadruple in a short time.
The greed to get rich fast and settle down with a BMW, an Audi, and a bungalow.
Screenshots showing profits in the hundreds of thousands shared on social media.
The list goes on. But there is the reality of the situation, isn't there?
No matter who you are, if you enter the options market as a newcomer, your investment will be wiped out within exactly 90 days, leaving you with nothing. If you make a profit of ₹1,000 on the first day, you might face a loss of ₹2,000 the very next day. People often enter the market without understanding concepts like Expiry Day, Option Greeks, IV, or Open Interest, only to see their capital drop to near-zero value in no time.
You might keep trying to recover your losses, only to lose even more—leaving you with nothing left to salvage. On average, nine out of ten people incur losses; this is the warning displayed before you log in—a warning you acknowledge before proceeding into the trading app. It triggers a rush of artificial dopamine; over time, you may find yourself compelled to trade every single day.
Therefore, if you are determined to engage in options trading, do not do so by borrowing money, taking bank loans, or pledging your jewelry. Those who came here to earn money might end up having to work overtime just to repay the debts incurred. You will lose your peace of mind.
If you want stress-free income, simply identify good stocks and invest in them; your wealth will grow steadily over time. These risks apply not only to options trading but also to intraday stock trading. So, do not step into deep waters without knowing the depth; recovering from this situation is extremely difficult.
Who is this suitable for, then? For those who wish to generate income using their own surplus funds—without borrowing—and who take the time to learn the basics of options and technical analysis; they might actually make some money.
In my opinion, those who cannot handle the stress or manage risk should simply invest in quality stocks and enjoy peace of mind. Are you buying and selling without knowing what you are doing?
Be careful—this post is for you.
Please share it with your friends!