Options Traders Pile Into Big Short on India Volatility.

SHORT selling (Securities); OPTIONS (Finance); INVESTORS; STOCK price indexes; INDIVIDUAL investors; TRADE secrets

Options traders are increasingly shorting volatility in the Indian stock market, betting that stock indices will remain within narrow ranges. This strategy has been lucrative due to India's rising wealth and the shift of global asset managers away from China. However, these strategies can be risky, as seen in the Volmageddon of February 2018 in the US. Trading firms such as Optiver, Citadel Securities, IMC Trading, and Jump Trading have been expanding in India, and a common strategy is to sell puts and calls. Retail investors make up a significant portion of index option trades in India, but the market regulator estimates that 90% of active retail traders lose money on derivatives. [Extracted from the article]

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