Option Call question

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Old 5th December 2007, 10:10 PM
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sandy_m is on a distinguished road
Default Option Call question



hi,

call writing (sell) questions -
1. what is trigger price associted with call sell?
2. how is margin calculated? what happens when margin is not enough?

Say reliance industry call sell is made at strike price 3100 at a premium of 45. Margin on position is 46k.
Now ICICIDirect under 'f&o open position' shows 2 options. One is trigger price as 2991 and second is an option to 'Add margin'.
What is the meaning of strike price? Under what circumstance I need to add margin? What will happen if more margin is not added?

What are the possibilities for this option in case underlying stock (reliance) reaches values of below 3100, 3100, above 3100.

thanks.

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