Advice please: FNO

N

nics04

New Member
#1
#1
I am a beginner in options trading. Last few sessions I bought few call and put options and covered my positions in profit. I have a query. If I buy a lot of nifty put option then I have to have the total amount of premium money in my trading account. Suppose If I sell a lot of nifty put or call ( say 1 lot of nifty 4900 call at Rs.110) then I will receive the premium amount in my account. Apart from this, is it neccessary that I must have additional cash in my account? My broker is ShareKhan. How exactly I have to cover this position before expiry? If I buy the same call at lower price after selling it at higher price , will this deal considered as closed? Please suggest your answers with respect to nifty options.
Regards
Rajesh
 
bunny

bunny

Well-Known Member
#2
#2
nics04 said:
Suppose If I sell a lot of nifty put or call ( say 1 lot of nifty 4900 call at Rs.110) then I will receive the premium amount in my account. Apart from this, is it neccessary that I must have additional cash in my account? My broker is ShareKhan. How exactly I have to cover this position before expiry?
Click to expand...
Short-selling options is called as "option writing". To write options, you need the margin money, unlike buying options where you need only the premium money.

Ex: If you wanted to buy 1 lot of NIFTY 5000 CE @ 80, then money required to 80 x 50 = 4000. But if you want to short 1 lot of the same options, you will need about 20 to 24K (or margin equivalent).

If I buy the same call at lower price after selling it at higher price , will this deal considered as closed?
Click to expand...
yes, position will be closed.

Since you are a beginner, I would let you know that option writing has higher risk. Instead of selling calls, you can puts (this is not a real substitute though, but only to keep the risk limited for a beginner).
 
N

nics04

New Member
#3
#3
Thank you very much bunny. If I square off the sold call/put option on the same day do I still need to have that margin money? Please let me know on what basis margin money is calculated?
Regards
rajesh
 
R

ramsrinivasan

Member
#6
#6
nics04 said:
I am a beginner in options trading. Last few sessions I bought few call and put options and covered my positions in profit. I have a query. If I buy a lot of nifty put option then I have to have the total amount of premium money in my trading account. Suppose If I sell a lot of nifty put or call ( say 1 lot of nifty 4900 call at Rs.110) then I will receive the premium amount in my account. Apart from this, is it neccessary that I must have additional cash in my account? My broker is ShareKhan. How exactly I have to cover this position before expiry? If I buy the same call at lower price after selling it at higher price , will this deal considered as closed? Please suggest your answers with respect to nifty options.
Regards
Rajesh
Click to expand...
Friend I advice for the fiscal 2010 directly to you..


Deep industries , finolex cable , indowind energy , reliance power , DLF , Maytas Infra , Radhe developers , NTPC , GSPL , Hanung toys , vijaya bank , UCO bank , IFCI Ltd , ICICI bank , IDBI bank , ACC cement and shiva cement , Shift from RNRL to reliance power , Educomp , Mphasis , ..

Finolex cables and indowind energy gonna reach targets of RS >.90 within a month or so, go and buy these two on priority basis...

These all are the stocks to be watched out for the fiscal 2010..

Cheers...

RAM SRINIVASAN..

Merry christman and happy new yera..
 
A

AW10

Well-Known Member
#8
#8
nics04 said:
Thank you very much bunny. If I square off the sold call/put option on the same day do I still need to have that margin money? Please let me know on what basis margin money is calculated?
Regards
rajesh
Click to expand...
u need margin amt in yr at the time of placing order else sharekhan will reject the sell order.
 
You must log in or register to reply here.
Thread starter Similar threads Forum Replies Date
A Could you please provide advice about my portfolio conversion? General Trading & Investing Chat 0
C Please suggest free or paid tool that can give advice on which options we should trade? Options 6
goldenedge Interactive brokers? CME group? Advice please. General Trading & Investing Chat 15
T Please Advice Me.. Software 0
J Please advice Introductions 0

Similar threads