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When You Should Not Buy Options

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When You Should Not Buy Options

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  1. When You Should Not Buy Options Read blog - https://navia.co.in/blog/when-you-should-not-buy-options/

  2. Introduction – Understand Before You Buy ● ● ● Options offer high returns but come with complex risks. Buying options at the wrong time can lead to total capital loss. Key message: Know when not to buy options to avoid costly mistakes. Navia Mobile App helps track live Option Greeks to support smarter decisions. ● Read blog - https://navia.co.in/blog/when-you-should-not-buy-options/

  3. Mistakes to Avoid – Timing and Volatility Don’t buy Out-of-the-Money (OTM) options with little time left – they often expire worthless. Avoid buying when Implied Volatility (IV) is high – you overpay and lose if IV drops. Watch out for Theta Decay – time erodes the value quickly as expiry nears. Example: Buy a ₹1,200 strike call on ₹1,000 stock with 3 days left → likely a loss even if price rises modestly. ● ● ● Read blog - https://navia.co.in/blog/when-you-should-not-buy-options/

  4. Risk Misjudgments – Misuse of Greeks & Over-Leverage Low Delta options move too slowly – small stock moves won’t impact option price enough. Over-leveraging is dangerous – a few bad trades can wipe out your capital. Use Delta, Theta, and IV to evaluate real potential, not just price. Example: A 0.2 Delta option barely moves with a ₹1 increase in stock price. ● ● ● Read blog - https://navia.co.in/blog/when-you-should-not-buy-options/

  5. Situational Traps – Events & Quiet Markets ● Avoid buying options during low-volatility periods – little price movement = low profit chances. ● Don’t speculate on earnings/news unless you understand IV crush. ● Post-event IV drop can cause loss even if direction is right. Read blog - https://navia.co.in/blog/when-you-should-not-buy-options/

  6. Disclaimer Investment in securities market are subject to market risks, read all the related documents carefully before investing. The securities quoted are for illustrative purposes and are not intended as recommendations. Brokerage will not exceed the SEBI prescribed limit. Navia Markets Ltd ,SEBI Registration No.INZ000095034-NSE Member code for CM, FAO & CD: 07708 - BSE Clearing No. for CM, FAO & CD: 6341-MCX Member ID: 45345 NSDL DP ID: IN300378-CDSL DP ID: 12086500-SEBI Registration No. for DP: IN-DP-311-2017-GST Registration number :33AAACM4739R2ZZ-Registered office: Ganga Griha, 4th & 5th Floor, No.9, Nungambakkam High Road, Chennai - 600 034 Email ID: ig@navia.co.in - Contact No: +91 70100 75500 https://bit.ly/naviadisclaimer Read blog - https://navia.co.in/blog/when-you-should-not-buy-options/

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