Option Trader Read This Very Patiently

As per the new Rule of SEBI of peak margin, there is a very high amount of chance that intraday trade-in cash as well as future and options market will hit hard after a few months.

So what will happen to low amount traders?

As the small traders, cant do Intraday after few days with broker margin so what these traders will do?

Scenario 1: This types of traders will stop trading, which id very unlikely.

Scenario 2: They will try to find out an alternative way to earn fast money.

So what will be the alternative way?

As per we feel most of the day traders will then move to trade

in options as they don’t have the capital to trade in futures.

So options trade may become more popular then future or cash trades.

But is this profitable for these traders?

As per we feel this will not benefit these traders as most of the traders as well

fell don’t know which options to take were to take and where to exit.

At the same time, due to the low volume in market volatility will be less so

options trader may find very difficut to sustain.

As a result, all stocks will move less compared to the current scenario.

These options trader may lose a very high amount of premiums in

both out of the money calls as well as puts.

Let’s take an example

Suppose we Took a Share ABC trading at 1000 Rs which future

lot Approx value set by the exchanges 2.5 lacs.

Now low capital trader will Jump to buy ABC call or put as they cant take future Intraday.

Say Mr/Mrs X trade-in ABC assuming price will move to 1100 in this Expiry and put His/Her 50k Rs in 1050 CE by

paying a premium of Rs 50 at the start of Expiry assume lot size of ABC 500.

But due to change scenario, market volatility will reduce significantly.

As a result, the Stock ABC will move very slow and say full expiry move in between  980 to 1030 Rs.

So the call buy trade of 1050 CE or reverse say put buyer 950 PE will lose the full premium.

All options traders may lose massive amount till market back to its original trade volume in a future date.

We advise all small traders after a few months before buying any call or put be careful.

As market speculations will reduce, you may lose all premium heavily.

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