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Uncle Theta: The Devil in the Gamma – The Risk of Selling Options Close To Expiry

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There has been a huge interest, recently, in doing the "mad option selling" thing. Some of this involves selling a very large number of out-of-the-money options close to expiry. On the expiry day, or the day before it, you sell a truckload of options just a couple strikes away from the Nifty or Banknifty, and laugh all the way to the bank as the market lets them expire worthless. The problem with this is simple: The devil lies in the Gamma, where a big move on expiry day wipes you out.  read more »

The Folly of Retail Investors Lending People Money, Without Collateral, and That Too, Online

Money is a commodity in very high demand. That’s not because there’s any less supply, but because people who have too much of it hoard it. And those that need money can’t get it easily, so they borrow it.

Lending …

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Charts: The Nifty P/E Crosses 27 Again, But….

Charts

In what is going to be another boring statistic on how the market is overvalued here’s the one we do often: The market P/E ratio.

The Nifty’s P/E is at a near high at over 27 right now. This sounds …

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SEBI Changes Rules for Bankruptcies: Buyers Can Take More Than 75%, Easier Delisting

We’re written a lot about bankrupt companies and how it’s dangerous to buy them. Current shareholders have felt cheated by the stocks’ movement after the resolution. (Read) Some of the objections to our assessments were:

Look, no one can own… read more »

Guest Post: What they did not tell us about long-term investing

This is a guest post by Anoop Vijaykumar. Anoop is a SEBI Registered Investment Adviser and writes about equity investing at thecalminvestor.com. Follow him on twitter @CalmInvestor

A picture is worth a thousand words

No pain, No gain

Money can’t …

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RBI Hikes Rates, But The Market Yields Had Already Moved Up

The RBI increased rates today. For the first time since Jan 2014 we have seen rates go up.

The repo rate (at which banks borrow) has gone up to 6.25%. The reverse repo rate is now up to 6%.

If …

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Uncle Theta: The Devil in the Gamma – The Risk of Selling Options Close To Expiry

20 Jun 2018

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