My first derivatives trade

So I took my first trade today. Watched some videos, thought I understood a few basic things, so want to trade options. Buying required less capital, selling required more, but as selling apparently has more chance of winning, and I understood more about selling than buying, took a trade.

Sold 1 lot of Nifty, 6th Oct 16700 PE.

Never checked how price moves in derivatives until today, so was surprised and uneasy looking at the rapid movements of ups and down in price. I was expecting price to change before the expiry, I was also prepared for a loss, but in a week’s time, but to see such super duper fast movements happening in less than seconds, was scary. Did not know about this, so did not expect this. I wouldn’t be surprised if HFT happens here, does it?

The thought of intraday price movement happening in options, just like with a stock, did not cross my mind. How else can price change without intraday movement? :no_mouth:

Converted the position to intraday, closed the trade for a little profit.

Mistakenly sold put instead of call, as I expected the market to go down. I think this has happened while adding the option to the list, not because of not knowing what to sell, as I took a screenshot before market opened :man_facepalming:

Want to learn more before I take another trade.

Got a tiny teeny hang of the thing, my first step, so I would have been glad even if I had made some loss :smiling_face_with_three_hearts:

FnO, here I come :dragon: :person_fencing:

So can you experienced traders have anything to say regarding my trade.

@AlgoEye @Jason_Castelino @raoawesome @ronin_sha @SpacemanSpiff @t7support @VijayNair and everyone else who can say something.


Just one Advice, paper trade at least 1-3 months before putting your money in options. Options are non linear instruments, prices are calculated using 5 different dynamic variables+ Demand/supply read black sholes model , so don’t treat it or think it like stock or future price which are linear.

Neostox is a very good free platform for paper trading options.

Yes, there are endless algos and scalpers in the market for index options. So , many trades happens in a sec, sometimes your price even not captured in the chart so that quick , institutional trades happen in nanoseconds.

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Good luck
You’ve entered the battlefield which is a negative sum game at the end of the day


That’s honestly relatable to what happened to me during my starting days.
I’d love to share it and would also look forward to hearing from others
My first derivative trade was in USDINR I always had a kick for currency rather than equities.
It was after the market started to recover after the pandemic I went short on 15 lots of USDINR (margin was somewhere around 2k) and I was afraid relentless because everybody was like don’t fast dollar see the markets they are bleeding it’s time to collect dollar its haven asset and stuff like that I had my motivation from a book called The Art of Contrary Thinking and reports from AAII.
When I closed the trade couple of weeks later I closed it with 38k in profits and never looked back.

The funny part is not everyone has a smooth first trade like me
My brother lost 16k in his trade (he brought some options of bank nifty).
Mine was beginner’s luck. Later I took a brake but tracked the live market time and got familiar with option greeks and their movements realtime and then I stepped into Nifty options.
It’s funny now that I look back on the way I’ve come
it’s a process and everyone has their way.


Exactly and it’s best to come here prepared

I know one thing for sure. Even if someone makes good money here his health will deteriorate in a couple of years because of tension and he will end up paying all that money towards medical expenses.:grinning:

Naked selling of option has unlimited risk.

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100% agreed. Paper trade first. I paper traded in sensibull testing and didn’t find myself profitable(with things like iron candor, put call ratio , butterfly). There was a better chance i would have ended up with lots of losses. Learning is something but applying it is another.

ATM and strikes nearby will be move lot like future and future moves like spot. ATM moves like strike. ATM also has high delta intra day. If you don’t like fast movement avoid trading the first hour of market open and market close. Volatility is very high during first 1 hour.

From rapid movements I believe you strike were away as vega increases as you move away from ATM. So for far end strikes big price movements can cause whipsaw.

Lastly it’s just your first trade. Take 10 trades via paper trading note down entry exit price and journal them.

I am little curious , is this the only option you sold ?please answer why


Will do that.

Yes, I think the movement did not seem like humans creating the orders. I have experienced regular intraday volatility, but this I think did not seem normal, this was super fast :thinking:

Me too. Looking back makes me feel that I have come some distance, and created a small process.

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Welcome to derivatives segment.
Wish you all the best.

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You are scaring me. Been 3 years now. Have I reached that stage? Any day health over wealth.


I would have sold at some point, I was observing it, so I would have sold it quickly.

A naive question. How could unlimited risk happen in this scenario? The amount I paid for the option will be lost, or the broker will sell all my rest of the holdings?

Just wanted to see how FnO looks like, hence 1 lot, so did naked, not again.

Will do.

Yes only that option, naked, because that is what I learnt, so took the plunge :face_with_peeking_eye:

Thought to buy next week’s expiry, as today is Wednesday.

Any tips, wisdom? :roll_eyes:

Have always been a learner, so thought to do this too.

No greed, no overconfidence, no illusion, so I will see if I can do, if I cannot, I will participate in other segments :grinning:

Honestly I use derivatives as an hedge. If I am selling calls I already have long positions. And if I am selling puts I have ready cash to take delivery. So I am no one to give you any tip.
Just be careful. It’s not as easy as it looks like. Today I spoke to a person who lost 54lakhs in FNO. He gave up trading. For him it wasn’t a big amount so it’s fine.

You have my good wishes. :+1:


If a person knows about himself, like really knows about himself, including his ignorance, his limitations, there will not be any tension, there will be the opposite, there will be calmness :person_in_lotus_position:

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I too looked at option from the perspective of hedging, but did not have such capital, in case when I am required to take delivery. I would rather buy the stocks on my own.

So I looked at it as is, pure trading.

Actually,its very counter intutive but trading/investing do brings very positive health impact especially with respect to mind and your perception to the world. Look at warren buffet,ray dalio and so many trader investors many lived healthy and above average life span.

Stress offcourse in any field is bad and its come with every field and if one is over excessive and stress is uncontrollable in trading /investing then its not the place for one.Its very personal thing.

Personally with me or many people trading/investing long its brought positivity with respect to health .