Thread: Risk hai toh ishq hai ?
1) A lot of people talking about today’s freak trade in 37100 PE in BNF
We as traders are always exposed to various types of risk and it’s a part of our business.
Let me highlight certain risk faced in past years & also ways to manage it
2) Gap Risk
18th may 2009
Markets opened at 9:55 AM as this was the market opening time at that time
Nifty immediately hit an 20 % upper circuit at 10.01 am and the markets froze.
So markets were open only for 6 minutes.
There are many such instances of overnight gaps
3) Vega Risk
On 24th August 2015, the Indian markets declined close to 5.92%.
Nifty around 490 points but something unusual happened on that day.
Far otm Call options shot up inspite of such a huge fall😲
Vix shot up 64%
4)Gamma Risk
26th sept 2019
It was an expiry day and 30000 CE went from 50 to 1000+ in minutes and eventually closed at 0
This move caused lot of leveraged traders to lose a significant amount of their capital
Many such instances of gamma risk on expiry day
5) Flash Crash
31st may 2019
Flash crash in Banknifty of 1000+ points.
Friday’s high of the Bank Nifty was 31,783 and the low point of the index was 30,623
Such flash crash has been seen in many stocks as well on other instances