Selling Calls?????

abhijit sen · #1 30th May 2007, 01:37 PM

Hi To All,
I Am A Newcomer And So My Question Might Be Very Silly To Some..........kindly Ignore That And Reply.............

When I Buy A Call , I Pay The Premium And Theoritically If I Sell A Call, I Get The Premium...........but Practically What Sort Of Margin Requirment Does Any Broker Charge To Sell A Call????
( Kindly Reply From Experience With Your Broker With Illustration)

Abhijit Sen

swagat86 · #2 30th May 2007, 01:50 PM

hi Abhijit,

Example,
CONTRACT : OPT-NIFTY-31-May-2007-4200-CE
CMP Rs 72
ICICI is showing a total margin of Rs 54,780.00(order margin 25590 and trade margin 29190)
for selling.

for buying Rs 3600(Rs 72*50)

Thanks

abhijit sen · #3 2nd June 2007, 01:07 PM

swagat sir u again...................always leading the pack in helping newcomers.........thanks for the illustration..........everything clear

abhijit sen

swagat86 · #4 2nd June 2007, 03:15 PM

Quote:

Originally Posted by abhijit sen

swagat sir u again...................always leading the pack in helping newcomers.........thanks for the illustration..........everything clear

abhijit sen

tnx.......

lsolanki · #5 4th June 2007, 04:08 PM

what about selling PUT strategy?
does it work?
i mean, i have seen in some sites claming that if u sell puts u have more chance of making money.
i am new so pls help

kkeskar92 · #6 4th June 2007, 08:28 PM

Hi Isolanki,
When you want buy a stock of a company that has a good long-term prospects, you can sell the puts at out-of money rates..and keep the premium. Even if the put is exercised, you have a good stock at cheap price minus the premium you have received. So selling naked puts is a good strategy to buy good company calls at better price otherwise you can keep the premium.

lsolanki · #7 5th June 2007, 02:31 PM

thanks for the reply KK sir.
one more thing
how much margin is blocked when we sell PUT
pls could u explain with example.

kindman · #8 6th June 2007, 07:26 PM

Ha Ha Selling Put Is Risky...

It Need More Margin

And Loss = Unlimited

And If U Want To Invest In Good Compani
Then Buy Call
Margin Less/ Loss Is Initial Amount Paid

lsolanki · #9 6th June 2007, 10:11 PM

thanks for the info

loosingstreak · #10 7th June 2007, 08:40 AM

Quote:

Originally Posted by kkeskar92

Hi Isolanki,
When you want buy a stock of a company that has a good long-term prospects, you can sell the puts at out-of money rates..and keep the premium. Even if the put is exercised, you have a good stock at cheap price minus the premium you have received. So selling naked puts is a good strategy to buy good company calls at better price otherwise you can keep the premium.

Hi kk,

Are not options cash settled here. I am confused . Could you please explain the strategy. I would really appreciate it. Thanks

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