New Delhi, Oct. 22 -- For small traders, expiry day can be tempting as the option premiums move faster and react sharply to price changes. It creates multiple opportunities but also increases the risk.

The problem is often not a lack of market knowledge. A trader may correctly identify the direction of the index and still lose money because of poor position sizing, late entries, uncontrolled losses or misunderstanding how options behave close to expiry.

Expiry-day trading needs a different level of discipline because time decay, gamma and rapid price movements can have a noticeable effect on option premiums. For traders with limited capital, even a few poorly managed trades can have a significant impact on the account.

Here are five co...