Context
Your 5 months of profit can be wiped out by 1 wrong day in naked option selling. Market makes unexpected move in all directions. People do prefer stop losses, but there is no guarantee of order execution at the desired price.
Taking an example from this person: Sensibull - India’s Largest Options Trading Platform
He started with 20-40K consistent profits in H1, then moved to 1-2L profits in H2. Today he lost 51 Lakhs, with drawdown of 28%.
It does not matter how experienced you are, things can go wrong seriously.
Feature requested
A kill switch feature in Dhan, which blocks naked option selling. You should not be allowed to sell the option unless you own an open bought position in Futures or Option.
People who want to manage the risk can surely benefit from this feature.
IMO greed and fear tend to find a way around kill buttons. The only person who can kill it is oneself.
Going naked short, Holding on to losing positions, Keeping hedges far away, Keeping mental stops etc are typical don’t dos that traders engage in. Not sure how Kill switch will help.
The moment I think I do, I’m dead. Market will finish me… Anything can happen anytime in the market and life. If there is anything certain that is uncertainty itself.
Just like others voice their opinion, I voice mine. That’s all.
Hi @Lelouche Well Dhan does have very comprehensive Trader Control’s to manage trades and risk. Last time I checked > 30% users on Dhan use at least one of them while trading. I will revisit these stats and check again.
That aside, as a broker there are a lot of things that we have a view that we will do or won’t do. One of the things we have consistency mentioned we won’t do is taking trading / investing decisions on behalf of users. I mentioned in other post today, when you execute an order via Dhan it takes < 50 ms most of the time; I checked today’s execution speeds and we had ~25% orders executing in < 25 ms. The biggest component in these execution times is ‘risk validation’ in which we check all possible computations on every order before we send it to exchange for execution.
When anyone expects us to say, check if an Order is Naked or not before sending to exchange - it essentially means (in a way) reading and validating your order against the order book, positions and then sending the same to execution. This will, in a way adds additional compute to every trade possibly a 2X increase in time. Also as I mentioned, we are generally very inclined for faster execution speeds… this feature while may be appear great - it is against our philosophy of taking trade decisions on behalf of user. Also as a user, I’m sure you would not like seeing messages like ‘pending validation’ before every order because these are additional checks, they will result in queues for execution, increase execution time, as a result lose trade priority on execution and also possible slippages.
As far as alerting goes, one of feature we are super proud of building from scratch is Manage Positions. Most of our traders use this - and it has a alert built-in when a position is naked.
Thank you for the detailed reply.
I agree with all of your points, but I haven’t requested that this feature be enabled everytime for everyone. Only the users who want to use this feature should be able to do so, and yes they will have to place orders with high latency.
We shouldn’t be taking decisions for the user, but not all the users are professional, and some might want to prevent their capital blowing up.
I have my core investment portfolio in Dhan and this will help me manage risk.
Anything can happen anytime in the market and life. If there is anything certain that is uncertainty itself.