Selling Nifty covered calls

ashok1010 · #1 30th December 2007, 08:21 PM

Hello,

I have a small query about writing covered calls in Nifty

If I own a long position in Nifty is it possible for me , to write covered calls and puts , without having to put in additional cash margin.

Thanks,
Ashok

ashok1010 · #2 30th December 2007, 08:56 PM

I thought you can sell covered calls if you own the underlying, isn't this what it is actually supposed to be ?

So is there no way to sell covered Nifty calls and puts and all calls sold on Nifty are naked ?

Could some one please enlighten me on this.

Thanks,
Ashok

rajsingh · #3 31st December 2007, 06:43 AM

You can write calls/puts as long as you put up the margin.A percentage of your demat account holdings are also considered margin by most brokers if that is what you mean.

ivanboesky · #4 5th January 2008, 09:30 AM

In India, there is no cross-margining between the cash and F&O segment. However, if you are long Nifty futures, and you sell a Nifty call option, you wont have to pay the entire margin on the call, just a small amount.