1/ Level-Based Trading on non-expiry days: On expiry days all OTM options are going to go to zero, so you can take a bet on a particular level for a high reward. But on the other days, the spikes are just too much, especially in this low-Vix environment.

Let's say you are already in a 1% loss, by the time your level comes you are down 2-3%. This means the current week is gone and no profit will come in the week. Better would be exiting the positions with a 1% loss and taking fresh positions as it's easier to cover 1% than more.

You might then end the week with a mild profit. Damage that you could have controlled which was 1% is now more than 2% just because you waited for that level to cut positions.

2/ Trading all breakouts You have to understand that not all breakouts work. Also, need to know in which environment breakouts usually fail. In such times, going long at supports is more rewarding than going long on breakouts.

After a breakout, we usually go directional with only selling puts but at times it simply reverses thereby giving a fake breakout. Those are the times when you should be quick in changing your stance.

This requires you to be very swift both in your mind and in your trading account. Quickness is rewarded. The market has changed so your positions should change too.

3/ Wrong way of adjusting Strangles Let's say you are in strangles, one side spikes up and according to you its a breakout, so you exit the calls which are spiking. This is even more dangerous because if it reverses then you lose the opportunity in call sell

Not only is the opportunity lost in calls but you also end up incurring a loss in put sell. If you are not too sure of a breakout then: 1. Can exit all positions and wait 2. Exit spiking calls and roll up without moving the put leg 3. If it comes down again roll your call down.

4/ Pay attention to your MTM: Some traders are really stubborn about their levels and they don't look at their MTM. This is definitely not recommended for beginners because it not only damages the MTM but also affects your psychology.

If your positions are up by 1%, so no matter what you cannot end the day on a negative note making losses. You need to control your MTM and protect your profits because a good trader will always focus on making profits instead of a level.

5/ OI data Absolutely useless in days when there are 9:20 straddlers, algo traders etc. If it goes above a level we think they are trapped but there's no such thing now, it can reverse just as easily as well.

For example: 42000 call OI is huge. All of sudden put writers overshadow the call writers, which means we should sell more puts than calls. Market can go to 42100 & reverse then call writers will overpower put writers thereby creating confusion. Cut the noise, rely on price.

6/ Indicators People think VWAP is important. On clear trending days, VWAP is very far away from the prices and not of much use. How will you determine your entries and your SL's?

On very volatile days BNF is trading within a range of 300-400 points, prices will frequently move above and below VWAP a number of times. Just an SL day for you if you end up taking all trades wherein you go long above VWAP and short below it.

7/ Placing emphasis on greeks Words like delta neutral and straddle premium etc is not required for you to make money from option selling. If you know what drives prices for a call or put that is more than enough to sell options and make money.

You don't have to know how delta behaves or gamma reacts for you to change your positions. Price understanding is enough by itself.

8/ For beginners better to avoid Tuesdays When FinNifty started we used to lose on Tuesdays or used to get trapped due to the volatility of FINNIFTY expiry. Most of Tuesdays, we realise in the end strangles would have rewarded better without any adjustments.

9/ Option Buying vs Option selling Both require a different mindset and hence don't try to become both. There is an itch in option sellers that they cant make maximum returns on a trending day by option selling. Option buying requires a different mindset and setup.

Still, if you have an itch for doing Option buying you can trade in a separate small account. This advice is specifically for Option Sellers.

10/ Wanting to trade in multiple instruments Stick only to indices or specific stocks. If you are doing Option Selling in stocks, try to restrict yourself between 5-10 stocks. Every stock has its own behavior, so try to understand that.

I only sell Options in Bank Nifty as I am able to gauge Bank Nifty's moves better than any other instrument. So find which instrument suits you the most.

11/ Don't try to time while entering a strangle It's a rookie mistake to first sell one leg and wait some time before selling another leg. If the idea is to sell a strangle, then enter both the legs in one go.

Don't try to outsmart the market by selling one leg and entering another leg when the other leg's premiums are a bit higher by 2-5 points. It may reward you once or twice but in the long run, it will be a loss-making practice. No one can time the market all the time.

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