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Jane Street barred from Indian markets as regulator freezes $566M

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518 points bwfan123 | 2 comments | 06 Jul 25 14:03 UTC | HN request time: 0.416s | source
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bwfan123 ◴[06 Jul 25 14:03 UTC] No.44480917[source]▶
I am shocked by the size of the retail index options traders. They are selling put options naked without any underlying hedges and getting fleeced as a result.

Two strategies are detailed with trades: 1) expiry day price discrepancies between index options and underlying 2) expiry day painting the close

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1. sokoloff ◴[06 Jul 25 21:21 UTC] No.44484156[source]▶
Selling naked puts doesn’t seem particularly outrageous. About half the time that I want to buy a position, I’ll sell a series of put options just OoM until I get assigned the shares I want, collecting small premium along the way.

My “hedge” in this case is that I want to own the shares. (I’m short vs where I want to be.)

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2. Fade_Dance ◴[06 Jul 25 22:11 UTC] No.44484555[source]▶
Futures index option traders are not looking to get assigned a basket of hundreds of stocks. They are cash settled, for one, so all that gets assigned is a profit or loss.