Reported 5 months ago
Options traders are heavily shorting volatility in India's market, with a strategy focused on betting that Indian stock indices will move within small ranges. This approach involves selling options while long-only funds and retail investors buy contracts for speculative bets or market protection. The strategy has been profitable amid India's rising wealth and global asset managers' shift towards Indian equities, but it carries risks of significant losses during sudden large market movements. The practice has gained attention after Jane Street Group's success and legal actions related to trading strategies involving Indian options. Traders are also profiting from offering to buy and sell a range of options, mainly focusing on shorting volatility, writing puts, and writing calls.
Source: YAHOO