Back in late 2020 I was in India and casually browsing youtube when post caught my attention. It talked about earning additional dividends on your equity investments using something called covered calls. I got interested and started digging around. And thus started a new chapter in my life. Options Trading!
I read up as much as I could watched countless youtube videos and finally got my broker to enable Options Trading for my account. I first trade I did was in 2021 Jan or Feb. And since then, I've covered some distance.
I am by nature, risk averse. Then what am I doing trading Options?? Options Trading is entirely about risk management. The best can make money on options buying, consistently. The novice lose money on options buying and the mediocre collect premiums powered by Theta Decay If they can manage their risks. Their returns(ROI) are a fraction of what options buyers make. So, where a good options buyer may make 100% returns on his capital every month, a mediocre(good) options seller can make 100% returns in a year. The truly mediocre can aim for 40-50% returns a year. Nothing great to write home about but enough to make it worth your while. Enough to foot your bills and even run your household. In other words a viable retirement passtime.
So, I started writing options. Before I knew it, was was playing with 1-1.5Cr capital and with half assed knowledge and little experience making 5 lacs a month. All while working full time. I was blown away. WoW! I could retire today! I thought. Then the tide turned. And come October, the maths was working backwards. I started losing money. 2 months of reversals and I stopped. I told my wife, I don't know how I'm able to make such money and if I knew I could be a champ. Little did I know that all that was happening to me was beginners luck. And by Oct-21 I was running running out of it. The law of averages was catching up and the heap of money was vanishing into thin air faster than I could imagine. And so after losing a third of what I had made I stopped. Got off the high horse and decided to go back and learn.
Like I said, I'm risk averse. And because of that I stopped when the losses started mounted. I did a good thing. I also got lucky. I got paid to learn my lesson.
