Covered call writing in India?

alroyraj

alroyraj

Well-Known Member
#5
#5
chander_rb said:
Any broker should do. No problems there.

I do not understand what you mean by Protected Short. Could you clarify pls.

Balachander.
Click to expand...
Sharekhan need 3.5 lakh to do any writing. Indiabulls has no such restriction. Ask at the others too. Cross margin need to verify,what exactly you mean. This feature you need to enquire it is not so commonly offered as u would expect.
 
G

global trader

Banned
#6
#6
Protected Short means: ( It is not naked unprotected)
Short a stock and purchase a CALL option ( at the money) to protect the downside
SO in case the stock starts going up you are protected as your call will go up and in case of closer you exercise the CALL.

Cross margin:
Both for "Covered call writing or Protected short the broker must not charge 2 margins hence it is called cross margin.

By the way can somebody tell me
Is there any way to get 100% finance to purchase top shares?
This kind of facility is easily available in Australia sometimes it is called "protected equity loan" or "Share protection plan"
The way it works is
The stock has to be one which also has Exchange traded options on it
Investor pays the cost of a PUT option and the interest on the loan to teh broker/bank
The broker gives 100% loan to purchases the stock and this loan is NON RECOURSE
that means even if shares go down to zero the borrower just returns the stock and walks away no more liability..
As you can see the brokers money is 100% protected because of the PUT option
Have a look at this http://www.leveraged.com.au/products/tailored_equities_multiplier.asp#casestudy
 
alroyraj

alroyraj

Well-Known Member
#7
#7
global trader said:
Protected Short means: ( It is not naked unprotected)
Short a stock and purchase a CALL option ( at the money) to protect the downside
SO in case the stock starts going up you are protected as your call will go up and in case of closer you exercise the CALL.

Cross margin:
Both for "Covered call writing or Protected short the broker must not charge 2 margins hence it is called cross margin.

By the way can somebody tell me
Is there any way to get 100% finance to purchase top shares?
This kind of facility is easily available in Australia sometimes it is called "protected equity loan" or "Share protection plan"
The way it works is
The stock has to be one which also has Exchange traded options on it
Investor pays the cost of a PUT option and the interest on the loan to teh broker/bank
The broker gives 100% loan to purchases the stock and this loan is NON RECOURSE
that means even if shares go down to zero the borrower just returns the stock and walks away no more liability..
As you can see the brokers money is 100% protected because of the PUT option
Have a look at this http://www.leveraged.com.au/products/tailored_equities_multiplier.asp#casestudy
Click to expand...
These schemes are yet to evolve in India. Previously I am aware of Axis Bank offering some finance scheme to invest in IPO. Remember the listing gains returns seen in the heady days a few years back. But beyond that I cannot say,its likely it is not offered.
 
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