New in option trading

AW10

Well-Known Member
#3
Someone has posted this in another forum
My question is:
1. is this possible to shortsell call/put?
2. is there anyother charges applicable for this?
Yes. It is possible to short using options.
Each option chain is a tradeable instrument on its own. i.e NIFTY MAY 3000 CALL is one instrument, and NIFTY MAY 3000 PUT is another instrument.
So if you Sell any instrument before buying or owning it, it is called shorting.
You can short stocks/ options or anything for that matter as long as u find the other party to buy from you and there is medium like exchange to settle it.

Someone has posted this in another forum
2. is there anyother charges applicable for this?
Brokerage, STT, Service Tax are the charges that u have to pay which is no different from any other transaction.

Third question that you have not asked but still I am highlighting here
"What is the risk of short selling option ?".
Answer is - Shortselling option has very very high risk and if you don't understand it, then probably you will blow your account in very short time.
So learn option trading before going ahead with short selling route.

Happy Trading.
 

AW10

Well-Known Member
#4
It is not mandatory to cover on the same day. You are right, the value of option goes down everyday..
There are different purpose for which u can use options like
- daytrading
- positional trading
- regular monthly income generation
- portfolio hedging
- and may be more

So it depends on your purpose.
For each purpose, there are different strategies.. Options give u lot more choice of strategies then stocks or futures.

Please go thru basics of options, options pricing, strategies etc before jumping into trading.

Happy Trading
 

AW10

Well-Known Member
#5
You pay brokerage and other charges when u execute a trade. If you are not executing trade on Monday the there is no brokerage etc. Because u are selling an Option here, so it will need margin money. Margin calcuation takes into account current market price so if at today's mkt price, ur margin is 20k, then based on market closing price on Monday, the margin amount might be 20k +/- something.
This amount is blocked only till ur position is open. Once u close it, then the margin money is released.

To read more about options - chk out 888options DOC com.
Chk out the thread by Linkon07 / bandlab on this forum where they had discussed about
a tool that will help u in analysing options trade.

Happy Trading.
 
#6
You pay brokerage and other charges when u execute a trade. If you are not executing trade on Monday the there is no brokerage etc. Because u are selling an Option here, so it will need margin money. Margin calcuation takes into account current market price so if at today's mkt price, ur margin is 20k, then based on market closing price on Monday, the margin amount might be 20k +/- something.
This amount is blocked only till ur position is open. Once u close it, then the margin money is released.

To read more about options - chk out 888options DOC com.
Chk out the thread by Linkon07 / bandlab on this forum where they had discussed about
a tool that will help u in analysing options trade.

Happy Trading.

thanks sirjee