New #OptionSellers that started selling options in May 2020 taking on that extra Leverage!

#OptionsTrading

This is what #IndiaVIX has done since May-2020.

#volatility

2/n
this wasn't going to be a thread, but then #wth

Let's see, now a new #Options trader, lets call him... nevermind whatever his name, gets into #OptionSelling in May-2020.

He has only seen a falling #Implied Volatility regime. If he isn't looking at IV, his sold options are decaying like crazy.

3/n

He is up on his capital nicely. Well done!

The thing is, he has not yet seen the effect of what an increase in #IV can do to his positions.

Moreover, he hasn't seen what a disconnect of IV and RV can do to his positions.

4/n

But given the nice performance of his trades, he decides to either increase his trading capital, or if he hasn't thought through it, goes on to increase leverage.

What could happen next, is what this tweet/discussion is about.

5/n