Nithin Kamath, Zerodha co-founder and Chief Executive Officer (CEO), said that the trick to becoming a successful trader was to survive the tough days and admitted that trading actively was the hardest way to make easy money in life. Taking to X (formerly Twitter), Mr Kamath said that there had been "sudden spikes" in option prices on expiry days in the last 12 months or more and traders have been continuously caught off guard. He also shared a post detailing strategies such as Bull Call Spread, Bear Put Spread, Iron Condors that offer less trading trouble.
"One way to ensure you don't lose money due to volatility is to trade fully hedged options strategies, such as spreads.. Of course, this alone won't help. You also need to ensure that you have you have a strategies to manage risk, size your positions appropriately," he said.
Take a look at the post below:
Mr Kamath shared a post by Sensibull on how to use fully hedged options strategies such as spreads. "The loss is limited, if you trade a spread, such as a bull call spread or a bear put spread, no matter what the market does, your losses will not exceed a fixed number," the post claims. "No need to worry about stoploss - Many retail investors are now suspicious of algos that hunt retail investor stoploss. We do not know if this is real. But you have every right to worry about this," it said.
Mr Kamath shared the post on Wednesday. Since then, it has seen a lot of responses from users, many of whom gave their own opinions on how to earn extra money.
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"The quickest way to double your money is to fold it and put it back into your pocket. Chasing quick money is the surest way of losing money quickly," wrote one user. "A trader buying a step by step guide to becoming a "profitable" trader is equivalent to a painter buying a step by step guide to becoming a "creative" painter," expressed another.
"True that, trading without fundamentals and enough background check is super risky," commented a third user.
