One more basic option question

Buying an option:
We have to pay the option premium (current option value * lot size) - clear on this part

Selling an option:
Reverse happens, we receive option premium (current option value * lot size)
What about margin? If yes, how much?
Is there any MTM when taking this position? If yes, is it dependent on ITM, ATM, OTM (in, at, out of the money) status of the option?

Thanks
Nitin

selling options is known as option writing..

margin will be same u need for nifty future trading

Thanks Lankesh. What abt MTM? Any idea?

Isn't anyone else selling/writing options?

Nitin

Anyone who can provide more inputs?

Yes, MTM will be applicable BUT really have not written any options till date so would not know.

Common logic says MTM would be applicable once the contract goes ITM from OTM
BUT then again the laws of our country and the financial biggies behind could be anything ....

on selling an option initial margin is charged and premium amount is credited.

with regards to M2M, it is adjusted every day against "settlement price" [ for sack of simplicity -- last traded price ] of the option. so if i sell an option @ Rs. 10 and it closes @ 9 then Re. 1 is credited to my account. and if closes @ Rs. 11 next day then i will be required to make good for the diff i.e. Rs. 2.

hope this clears your doubts.