Help me in options

[AW10]

Nilesh, TT and RKK have done their bit by explaining you the basics of this strategy.

Plz refer to this link and understand more about this strategy called Short Strangle.

http://www.theoptionsguide.com/short-strangle.aspx

Happy Trading

 

[nilesh80]

Thanks trader.trends, rkkarnani & AW10 for taking your time out to answer queries of newbies like me. Can you tell me where i can get to know how much margin one needs to have for writing option (span margin details) ?
Thanks again,
Nilesh.

 

[AW10]

Chk out NSE site for basic concepts.. and check with your broker / Help section of their site for actual.
Margin rules may vary from broker to broker.
Roughly - it is between 25 to 35k for 1 nifty contract.

Happy trading.

 

[nilesh80]

Thanks AW10 for your help. I appreciate your sincere efforts in constructing thread like ' Low Risk Option Trading Strategies' and also for always coming ahead to answer queries.
Thanks again,
Nilesh.

 

[munde_77]

Nilesh, TT and RKK have done their bit by explaining you the basics of this strategy.

Plz refer to this link and understand more about this strategy called Short Strangle.

http://www.theoptionsguide.com/short-strangle.aspx

Happy Trading

I trade mainly in short strangle otherwise short straddle

 

[prasham]

Please excuse me if I have posted it in the wrong thread. While studying basics of Options I learnt that Nifty is a European Style Option and hence you can't square off your positions before the expiry. Is it real? Does it mean that if I use some strategy for example spreads and trade in Nifty Options, I can't book profit or loss before the expiry?

 

[trader.trends]

Please excuse me if I have posted it in the wrong thread. While studying basics of Options I learnt that Nifty is a European Style Option and hence you can't square off your positions before the expiry. Is it real? Does it mean that if I use some strategy for example spreads and trade in Nifty Options, I can't book profit or loss before the expiry?

Prasham

You have to understand the difference between squaring off and exercising. You can square off Nifty or stock option trade any time you like. Stock option can be exercised any time in the month. Nifty is exercised automatically on the expiry day. Look up Investopedia or Option education sites for details on exercising.

 

[prasham]

IMO (from whatever I've understood so far)...
Exercising = Exercising the "right" to buy / sell
Squaring Off = Squaring off the bought / sold, Calls / Puts in order to book Profit / Loss.

Thus if I buy a Nifty Call and in few days I have handsome profit I can book my profits anytime even before the expiry. I hope I am right.

Thanks for the prompt help TT.

 

[trader.trends]

IMO (from whatever I've understood so far)...
Exercising = Exercising the "right" to buy / sell
Squaring Off = Squaring off the bought / sold, Calls / Puts in order to book Profit / Loss.

Thus if I buy a Nifty Call and in few days I have handsome profit I can book my profits anytime even before the expiry. I hope I am right.

Thanks for the prompt help TT.

Yes Prasham, you are correct in understanding. Only option buyers can exercise to sell. Option sellers cannot exercise to buy. The right to exercise vests with the buyer of options.