Love Options Selling? Here's What Can be Done in USD/INR!

Options selling has picked up the pace quite aggressively in the last couple of years, especiaaly amongst newcomers.

The whole idea of writing a far OTM option and letting it expire at Zero in a quest to make easy money is the main attraction here. However, as there are no free lunches in the forex market,the associated risks should also be taken into consideration while placing your bets.

For the last many sessions, the USD/INR Pair has almost become dead. If you look at the daily chart of it, the range has consistently been squeezing which has helped options sellers make decent money since mid- December 2022. As the pair is moving in the sideways direction on the back of subdued volatility, this is the best condition for selling far OTM options on both sides.

On the other hand, low volatility aslo means that if a sharp move comes, the prices of options can shoot up in the blink of an eye, leading to hefty losses. Those looking for a directional move in order to sell options on the opposite side, might also get a good chance in the immediate future.

The pair is forming a symmetrical triangle on the daily chart. This is a volatility contraction pattern and represents that the underlying security is going through a volatility squeeze. However, upon a breakout on either side of the triangle, the volatility is expected to expand sharply, leading to a one-sided move in the security.

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