Why People Lose Money in Option Trading Reasons & How to Avoid

1. Why People Lose Money in Option Trading: Reasons & How to Avoid Trading in the derivatives Future & Options (F&O) segment can be interesting as well as money making but there is an inherited risk that people underestimate and incur the losses. Do you know people lose more money rather than earnings from this segment? Yes, as per the study by SEBI, 9 out of 10 individual traders incur losses while trading in the F&O segment. I think you have seen a pop-up message on your mobile or computer screen whenever you log into your online trading platform and enter into the F&O segment. Read More www.moneysukh.com STOCK EQUITY IPO MUTUAL FUND FUTURE & OPTION ETF SGB EVENT TRACKER Market Hunt Derivative reports Commodity reports Margin updates Monthly Magazine Blogs

2. Why Do Most People Lose Money Trading Options? Losing money in the financial markets is very common if the market does not move as per your expectations. In options trading, most people lose their money because there are too many complexities, and option premium prices are highly sensitive to price fluctuations. And people who don't have knowledge and understanding about options trading majorly lose their money. Apart from that, lack of formal trading education and improper risk management are the major reasons behind the losses in options trading. Read More www.moneysukh.com STOCK EQUITY IPO MUTUAL FUND FUTURE & OPTION ETF SGB EVENT TRACKER Market Hunt Derivative reports Commodity reports Margin updates Monthly Magazine Blogs

3. How Many People Lose Money in Option Trading? It is a fact, in the options market, significant majority of people lose their money but most of them are young investors. As per the study, while analysing the trading accounts of leading brokering houses, around 85% of young traders lose their money within their first year of trading options. Further, as per Bloomberg's investigation, in the retail segment, option trading revealed that young generation traders lured by high gains quickly are closing their option trade positions into the losses. Read More www.moneysukh.com STOCK EQUITY IPO MUTUAL FUND FUTURE & OPTION ETF SGB EVENT TRACKER Market Hunt Derivative reports Commodity reports Margin updates Monthly Magazine Blogs

4. 7 Reasons of Losing Money Trading Options Lack of Knowledge about Options Option trading is a complex procedure, not easy to understand or implement for everyone, especially for people new in the market or mainly trade in the cash market not in F&O. Such people don't know how options price works, how much the option premium price can be changed when the price of the underlying security changes. Hence, lack of knowledge and experience in trading options is one of the biggest reasons for incurring losses. Read More www.moneysukh.com STOCK EQUITY IPO MUTUAL FUND FUTURE & OPTION ETF SGB EVENT TRACKER Market Hunt Derivative reports Commodity reports Margin updates Monthly Magazine Blogs

5. 7 Reasons of Losing Money Trading Options Underestimating the Time Decay Every option contract has a fixed date of expiry on which the value of the option premium becomes zero. As soon as the option expiration date comes closer, the price of the option premium loses its value due to time decay. This time decay is also called the theta, as soon as the expiration date arrives the option premium starts losing its value at a faster speed. Read More www.moneysukh.com STOCK EQUITY IPO MUTUAL FUND FUTURE & OPTION ETF SGB EVENT TRACKER Market Hunt Derivative reports Commodity reports Margin updates Monthly Magazine Blogs

6. 7 Reasons of Losing Money Trading Options Unexpected Volatility in the Market Every option contract has a fixed date of expiry on which the value of the option premium becomes zero. As soon as the option expiration date comes closer, the price of the option premium loses its value due to time decay. This time decay is also called the theta, as soon as the expiration date arrives the option premium starts losing its value at a faster speed. Read More www.moneysukh.com STOCK EQUITY IPO MUTUAL FUND FUTURE & OPTION ETF SGB EVENT TRACKER Market Hunt Derivative reports Commodity reports Margin updates Monthly Magazine Blogs

7. 7 Reasons of Losing Money Trading Options Buying the Options at High Premium While trading in the options, option buyers pay the price for the premium, while sellers receive these premiums. And when traders in a volatile market buy an option contract at a very high price, then it becomes risky for them to make the profits. Usually, traders who buy the option at a high premium incur losses even market moves in any direction. As the price of the premium of the option, contracts can be influenced by various factors like volatility, expiration duration and the difference between the current price and the strike price of the underlying security at which trade is executed. Read More www.moneysukh.com STOCK EQUITY IPO MUTUAL FUND FUTURE & OPTION ETF SGB EVENT TRACKER Market Hunt Derivative reports reports Margin updates Monthly Magazine Blogs

8. Thank You Contact us: 96382-37000 Mansukh Securities and Finance Limited: SEBI Registration Number-INZ000164537 ( Members- NSE,BSE,MCX, ),IN-DP-72-2015 ( DP-NSDL, CDSL ) Mansukh Stock Brokers Limited : SEBI Registration Number- INZ000164937 ( Members -BSE ), IN-DP-36-2015 Mansukh Commodity Futures Private Limited : SEBI Registration Number-INZ000063032 ( Members- NCDEX ) Mansukh IFSC Broking Private Limited : SEBI Registration Number- INZ000099432 (Members- NSE IFSC, INDIA INX)Procedure to file a complaint on SEBI SCORES: Register on SCORES portal. Mandatory details for filing complaints on SCORES: Name, PAN, Address, Mobile Number, E-mail ID. Benefits: Effective Communication, Speedy redressal of the grievances Investments in securities market are subject to market risks; read all the related documents carefully before investing. www.moneysukh.com STOCK EQUITY IPO MUTUAL FUND FUTURE & OPTION

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