Option Buyers

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 Buyers 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 the options. 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 it’s better we should give enough time to educate you first before putting out hard earned 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 basic things about options 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 the picture?

The option came in the picture for hedging our positions. It’s a hedging product, not a money multiplier product. That is the difference between professional Option Traders and immature Traders. Professional trade calculates 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 the option price was going down and down and on expiry, it became zero. So don’t trade with the hope that maybe it will give us a move.


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

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

Thank you so much. Have a profitable trading.


About Sachin Siwal

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