risk management in options buying

I am new in option buying .
I want to know some risk management technique in option buying especially in BankNifty weekly options .

like regarding stoploss ,holding period etc.

1 problem I am facing it
I buy a call at premium of 500 rupees , I set stoploss of 50 points i.e 450 , it is so volatile that it hits the stoploss and reverses the direction ,again premium moves to 600-700 ,then its hurts.

and suppose I don’t put stoploss and it goes against me say on friday ,monday (few days left to expiry) ,should i book loss or hold till expiry .
any tips when to hold or when to book loss.

It looks like you haven’t optimised your strategy yet. Have a well defined strategy with predefined entry and exit criteria. Based on your strategy, you need to check its performance by back testing for different stop loss (%) and target (%) and find the optimal parameters.

Apart from the generic advice for option buyers such as have as low holding time as possible due to option decay, most of the risk management which includes position size and SL (%) will depend on your strategy. You will have to work it out yourself.

You may choose not to put SL and lose the whole premium if this works better in your strategy. Otherwise having a SL always works better.

There are no rules which work all the time. Some rules of thumb are :

  • Holding options over the weekend are risky due to option decay on saturday and Sunday.
  • Buying options one day before expiry is risky again due to high decay.


If you are new to trading or option buying, don’t trade options. You will simply lose money like water or sand slipping through your fingers. Work on your strategy rigorously before you actually start trading, and even then be ready to take heavy blows to your capital.


Before going to Option buying pls test your strategy on USDINR Future. It gives experience about markets.

Avoid buying high premium options to lower the loss if you don’t put SL. 80% options tend to zero.

I buy mostly Nifty Index options which is less volatile than any other stocks and highly liquidity with SL is capped at 20% of option value. I buy options for intraday below Rs.100.

Unlike options ,Futures don’t pose risk of time decay as premium wipes out as expiry comes near.

So USDINR futures are best for beginners. Pls give a try, hope it helps.


  • Low margin required.
  • Low volatile
  • Lower Risk,
  • Mostly trending

Twitter post by @Karthik Sir for more insights.
Twitter post

P.s- Volatility kick sl mostly, it’s normal.