Two main concerns in options trading!

There are two main concerns with the unprecedented rise in options trading; one it increases volatility & second it distorts market reality. Lot of option sellers assume that market will remain in certain range, so when it deviates sharply from this expected range the option sellers are forced to take bets in same direction to minimize losses. In event of adverse price move, the option traders are supposed to use hedging strategies to minimize risks. But due to high cost of hedging they generally avoid it. The widespread use of algorithmic trading strategies has made outcomes disastrous for even the smartest of traders.