In recent years, India’s retail traders have increasingly been showing interest in market segments beyond equity trading. With the democratisation of investment knowledge and easier access to trading platforms, individual traders can now participate freely across multiple market segments with just one trading account. More specifically, the derivatives market has become a particular favourite among retail participants.
Data from India’s stock exchanges reveal that in 2023, the daily average value of underlying assets in stock options trades grew by over 100% between March and October — hitting a record high of $4.2 trillion. However, although individual traders are flocking to the F&O segment, not many of them are successful. A recent study by the Securities and Exchange Board of India (SEBI) includes data that reveals the exact opposite — 9 out of 10 options traders faced losses in FY22, and the average loss size was as high as ₹1.1 lakh.
Samco Securities, India’s leading technology-first stock broker, has been committed to reversing this trend and turning things around for futures and options traders in the country. Speaking of what Samco Securities aims to accomplish, Ajay Dusane, the firm’s Chief Growth Officer shares some revealing insights.
“Most options traders struggle because they don’t easily get the tools they need. At Samco Securities, we’re committed to resolving this issue. We’re bringing everything an options trader needs right to their fingertips. With the Samco trading app, traders now have direct access to options chains, options Greeks, and even an industry-first tool for building options strategies. These tools make complex trading processes simpler and more accessible and ensure that traders have what they need to succeed right from the start. This is how we’re turning the tide for futures and options traders across India.”
To fully understand and appreciate how revolutionary the features of the Samco trading platform are, it’s crucial to assess the problems plaguing options traders in India.
Decoding What’s Troubling Options Traders in India
One of the major issues troubling options traders in India is the unavailability of all the required data points in one place. To analyse options chains, track market movements and assess options Greeks, traders need to switch between different platforms. Needless to say, they lose precious time in doing this and often miss out on trading opportunities in the market.
Additionally, the sheer volume of data makes it nearly impossible for traders to manually analyse all the details simultaneously. The overwhelming amount of data further amplifies issues like missed trading opportunities and errors in judgment because traders need to keep up with the information.
To deepen the issue, many traders view options trading as gambling or playing the lottery. Such a perception discourages participants from committing to their trades more seriously. Instead of planning strategically and making calculated traders, traders with this attitude tend to rely more on luck rather than analysis for trading success.
Risk management is another common issue, even among traders who understand the complexity of options trading. To make quick gains, F&O traders tend to primarily execute easier — and often naked — strategies like buying or selling calls or puts. They do not consider more protective multi-legged strategies that can limit losses and reduce the risk of significant financial setbacks.
Above all, options traders do not have access to the tools and data necessary to execute trades successfully in a volatile market segment. Options Greeks and options chains are only available on select trading platforms, and often, they come at a premium that further eats into the minimal profits that options traders typically make. To offset this common yet serious issue, options Greeks and chains available on the Samco trading app are updated in real-time. What’s more, Samco charges no fee from traders for these industry-first analytical tools.
The Significance of Options Chains for Options Traders
Options chains are comprehensive listings that display all the options available for a particular security. The options chains available in the Samco trading app reveal crucial details like the types of the option contract (call or put), strike prices, last traded price (LTP), open interest, change in the open interest, implied volatility and options Greeks.
By studying these details, traders can assess the market, analyse how the options prices may move and understand the market sentiment better. This makes it possible to strategise options trades more effectively. For instance, by examining the relative demand (or open interest) for calls and puts at different strike prices, traders can gauge investor expectations and predict how the price of options and their underlying assets may move.
Options chains are also essential for pinpointing trading opportunities and constructing optimal options trading strategies. This is especially valid in the case of complex strategies like spreads, strangles and straddles, all of which involve buying and selling multiple options contracts simultaneously to capitalise on prevailing market conditions.
The wealth of information in options chains is also pivotal in balancing the risks and rewards of a potential position in the market. When combined with the wide range of analytical insights offered by Samco Securities, such as options Greeks, implied volatility, open interest and more, options chains can dramatically improve trading performance among options traders in India. Although a few other platforms may offer some of these insights, traders often have to pay a premium for these insights. However, Samco Securities ensures such tools and analytics are made available to the user for free — at no additional cost whatsoever.
Choosing the Right Trading Strategy in a Dynamic Market
With the information that options chains offer, traders can also compare the premiums of different options contracts, identify undervalued or overvalued options and execute trades with a high potential for profits based on their market outlook and risk tolerance.
Samco’s Ajay Dusane explains how using a combination of tools like the options chains and options Greeks in the Samco trading app can help traders identify and execute optimal strategies in a dynamic and volatile market segment.
“Options chains give traders a clear view of market movements and pricing in real-time. When this insight is coupled with options Greeks, traders can identify the strategies that are perfectly aligned with their market outlook — be it bullish, bearish, neutral, or anticipating volatility. The Samco trading platform also supports one-click strategy execution, so traders do not miss out on opportunities in the market.
The combination of options chains, Greeks and efficient strategy building brings in a level of precision and adaptability that was previously hard to achieve. Our goal at Samco is to equip our traders with the capability to swiftly adapt and optimise their trading strategies, so they're always positioned to make the most of the market's opportunities.”
With the advanced options chains in the Samco trading app and a host of other features like the Samco brokerage calculator, Samco margin calculator and more, traders can turn things around and minimise the risks they take on with each new position in the F&O segment. The availability of all necessary data points at their fingertips makes it possible for traders to make informed decisions — which may have otherwise been impossible to do manually. The silver lining is that traders with the Samco demat and trading account, who belong to the Samco trading community, can tap into all these benefits and freer of cost.
About SAMCO Securities
SAMCO Securities was incorporated by Mr. Jimeet Modi, Founder & CEO of SAMCO Group in 2015. As the country’s leading wealth-tech platform, SAMCO Securities provides retail investors access to sophisticated financial technology and makes their wealth-creation journey simple, informed, and cost-effective. SAMCO Securities mission is to eliminate the existing challenges faced by traders and investors and democratise access to wealth management process for every Indian. With customer centricity at SAMCO’s core, we implement a quantitative approach to provide differentiated solutions that empower our customers in acing the capital markets.
No VCCircle/TechCircle journalist was involved in the production of this content.
