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The rise in options volumes despite huge losses faced by retail investor has Sebi worried

The combined average daily turnover of the BSE and NSE hit its lowest point at Rs 72,512 crore, a 20 percent drop from the previous month, marking the largest decrease since June 2022. This is the first month-to-month decline since March 2023.

What looks like an easy arbitrage — borrowing at 8.5 percent and investing at 12 percent — is not so clear-cut. The transaction may work out in case equities give phenomenal returns, but one cannot go with such assumptions.

Mathematically, Narayan said, the best way to make money is asset allocation

A simple call option can be managed with a stop loss and revision of the same during the tenure of the trade, however, with a synthetic call we can do a little more

The index closed at 11.31 on October 25, before shooting as high as 12.17 from the low of 8.82 in the previous session – traversing a range of 38 percent.

Options trading in India has seen an explosive growth over the last three years, with the annual turnover of options premia climbing from a little over Rs 13.12 lakh crore in FY19-20 to Rs 118.88 lakh crore in FY22-23.

A section of the market, especially those who were sitting on cash, is happy with the heavy selling, as they are getting an opportunity to deploy money. However, another section, namely, put option writers, is scrambling hard to contain the heavy toll that the routing has delivered to them.

Shubham Agarwal explains an Option trading strategy in a choppy market.

The matter pertains to trading losses sustained by traders due to technical glitches caused due to the utilization of bandwidth to its maximum capacity on July 7.