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Why Option Buyers end up loosing their entire capital?

Hello friends.

Hope you all are doing well. Today we discuss why most of the time an option buyer end up losing their entire capital?

There are so many reasons like

1: Education

We saw most of the option has lack of knowledge about option. They don’t know how option premium calculate, how option Greeks play their roles, which strategy you should use on a particular time, how to read the option data and many more…

So its better we should give enough time to educate you first before putting out hard earn money on risk. Today we are living in a world of technology so we have many more options to gain knowledge so use them and try to learn first very basis things about option trading.

2: High return expectations

We saw daily people are expecting 40-50% returns from their option position. Is it possible? First try to ask why option came in picture?

Option came in picture for hedging our positions. It’s a hedging product not a money multiplier product. That is difference between professional Option Traders and immature Traders. Professional trade calculate every possibility in each trade. You can only make a constant income if you use them with hedging strategies. There are so many strategies you can use based on time frame and Events. So do it in a proper way if you want to make a consistent income from options.

3: Hope and Greed

There is no place of emotions in this market. You have to learn and fix it in your mind. We saw many people holding their naked positions till expiry in Hope that it will give them profit. But every day pass Greeks plays their roles very perfectly and option price was going down and down and on expiry it became zero. So don’t trade with hope that may be it will give us a move.


Option is very calculative products you need to do every calculation before taking any trade in it. So try to learn first, than only you can make profit from options. Options are very good product if you are doing it in a proper ways.

Hope you like my post. Any query or suggestions please leave in comment section.

Thank you so much. Have a profitable trading.


About Sachin Siwal

Sachin is NSE Certified & AMFI Registered Financial Advisor. Having an experience of more than 8 years in Indian Share Market. A well-known face on Social Media, Technical Analyst, A option writer, Educator, Strategy Builder and a keen follower of Indian Share Market.

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