Covered Call writing on Indian market

Hello

I am used to Options writing ( selling) on US and other markets and I am interested in finding out how one can do the same on Indian Market

It is hard to get the questions across to some broker sales people
May be some of you can help me
Which options are liquid? Equity Options? Options on Futures etc?
Do brokers in India allow Covered call writing ( and cross margin)
( Long underlying and short option)
Best broker for such trading ( online)

Also have other questions about leverage offered basic Equity

Appreciate all help

1. Not ALL brokers give u cross margin.
2. You have Index Options and Equity Options. ALL are European in nature.
3. Index options are most liquid.
Some equity options too are liquid .. u need to watch which ones suit your position sizing / RR etc
4. Best broker .. there is a thread on Brokers .. u need to go through that .. as I do not know. Even the brokerage is discussed there imo

Hope this helped.

Cheers ...

Thanks Murtza
I am looking for a broker who specialists in Options ON Futures and does cross margin

MOka, Good to see experience option writer on the forum. Would like to answer some of your questions comparing to US experience.

We don't have broker in Indian market like optionsexpress/ thinkorswim etc who specilise in options trading. You can talk to few leading, seasoned brokers like indiabulls, sharekhan etc so see if they can serve your purpose.

In indian market, it is possible to deposit your stock holdings and raise a limit against those shares. This limit can be used to fund the marging of short options. The limit depends on stock / borker so better to market research on it.

Coming to reality of equity options trading in India - all stock options are not consistently liquid. Particular strike of a stock becomes active at some time and after few days as underlying moves away, the strike become illiquid.

Some stocks like Reliance have good liquidity for atleast 2 to 3 strikes on either side of ATM.

And hope you remember, covered call is nothing but Naked short put position. Hence risk management is crucial.

Please check out the tool option oracle (google and download the software) for option analysis. This can be connected to indian exchanges for analysis, risk graphs, greeks etc.
Expect to see very primitive option trading platform and tools from even the leading brokers (nowhere comparable to the platform of opex, tos or ib).

all the best and happy trading.

Thanks
Do you have any contacts at these brokers because when I send general inquiry , i really had hard time explaining what Cross margin means etc
All they kepp saying is " Yes sir you can trade Option"

Also trying to find what basic Margin loan / leverage is
In US = 1:1 ( you have 10 K you can purchase stock worth 20 K)
In Australia = 1:3 ( you have 10 K you can purchase stock worth 40 K)
India =?????

In Indian market, it is possible to deposit your stock holdings and raise a limit against those shares. This limit can be used to fund the marging of short options.
SO is there no such thing as Covered call?

Coming to reality of equity options trading in India - all stock options are not consistently liquid.
May be Index option ( options on Index futures is)
Even there hard to find what margin is required for a futures position

I don't think any of the brokers allow covered calls in India.

But will be interested to know how margins are calculated?

If you are trading in the US what is your reason for wanting to trade here?
The US markets have liquidity, margins and everything else.
Brokers will allow you to trade any damn thing as long as it generates brokerage.
Just don't ask for margin even if the trade is bulletproof. :rofl:
In India, if you have 100k in your account you can buy stock worth 100k only and not a penny more.
There are a couple of brokers that offer 5 to 6 times account value however I would not do it.

Hai
Yes it is allowed But the broker will decide the % on margin If you trade buy and sell on a same scrip in F & O and option at lease 50 % of your margin will be released CONSULT YOUR BROKERS

reason why I am exploring India is
- may be arbitrage opportunities exist! BSE/NSE? which does not in developed world
- somebody said consult your broker... I don;t have one and the emails to Tata, ICIC, Zerodah get answered by sales people who rather than looking at specific questions keep asking me if I want to open an account

So I was hoping I get some direct knowledgable contacts via this forum but that also is not happening

It seem doing business with India is always frustrating... ( I am Indian so don;t get me wrong) Evne private industry like stockbroking should be more pro active to attract foreign investment
The quality of info you can get from places like www.asx.com.au or www.cme.com is very good
It has benn a very frustrating try.. soem say margin is available some say NO
jane do
" is model me aisa hi aata hai.. lena hai to leo nahi jao " seems to be the attitide

This is only my opinion, I could be wrong.
Daytrading arbitrage is almost dead, since software is much faster.
Futures/cash arbitrage will always be there, if you know how to trade it.
Brokers are not interested in giving reduced margin because they get nothing from it.
99% of retail traders are directional and don't know or do arbitrage. IMO, covered calls are one of the riskiest strategies unless collared.
You would be much better off trading directionally with small money rather than putting in more money to get peanuts.