Margin on Long Butterfly

[optionwriter]

oh!! ...

 

[Probability]

Dear Jagan,
What he mentioned 8.5L is zerodha margin as he trading with them....by asking them more its not possible for them as thier platform is common for all.....Better to ask with IIFL they give personalised margin policy who trades in big like amrutham...bargain for brokerage too

Hi,

Did any one check with IIFl for personalised margin policy ?

 

[pannet1]

As per Interactive Brokers website, there is no margin on Long Butterfly strategy.

Long Butterfly:

Two short options of the same series (class, multiplier, strike price, expiration) offset by one long option of the same type (put or call) with a higher strike price, and one long option of the same type with a lower strike price. All component options must have the same expiration, same underlying, and intervals between exercise prices must be equal.

There is no margin requirement on this position. The long option cost is subtracted from cash and the short option proceeds are applied to cash.


Could any one trading with IB, please confirm if this is applicable in India.

Is there any other broker in India, who provides margin benefit in this case?

That could be an international version for the US market. The real culprit is the exchange, they treat every Sold option individually and even force broker to secure the margin if some broker is really smart. there is no spread trading in india (where many legs are considered as one trade and margin policy is selected accordingly).

This type of discussion have come up before in TJ and usually the exchange had the last laugh. There are some firms who i believe still allow you to trade without margin or very less margin, but you need to share your profit or pay higher brokerage.

just my few paise.