Selling a option first

ameyanaik82

ameyanaik82

New Member
#1
#1
hi i m new to options trading. I have a query about selling an option contract first. can we sell a option contract first say 5900 CE or 5700 PE first and then buy it. if we can do this then what will be the charges that have to borne by me or is it same as when i buy a call/put and then sell. i do my trading through RKglobal.

hoping for a reply soon
thanx in advance :thumb:
 
C

comm4300

Well-Known Member
#2
#2
ameyanaik82 said:
hi i m new to options trading. I have a query about selling an option contract first. can we sell a option contract first say 5900 CE or 5700 PE first and then buy it. if we can do this then what will be the charges that have to borne by me or is it same as when i buy a call/put and then sell. i do my trading through RKglobal.

hoping for a reply soon
thanx in advance :thumb:
Click to expand...
Selling an option [call/put] requires margin; while buying an option requires just the premium.

there is unlimited risk involved with selling options; hence margin - as specified by exchange and as decided by your broker would be required.

For the most part, margin required is similar to futures. Refer to your broker's SPAN margin file to know the exact amount.
 
C

comm4300

Well-Known Member
#3
#3
to further add:

If you intend to sell and buy options intraday - only a certain percentage of the margin maybe required.

My broker Zerodha charges 40% of the span margin for Intraday positions.

check with your broker if they have some similar margin.

all the best.
 
A

aces27

Member
#6
#6
With zerodha ,

Assume I have Rs.5 L ,
How many lots of Nifty Options can I buy for Intra Day.
( For understanding - NIFTY CE - Near Month - 5000 - trading at Rs.100 premium)

For Buy :
1 Lot = 50 x 100 = Rs.5000
So For 5 L - 100 Lots.
Am I correct ?

And If I am to sell first ?
A rough estimate on how much can be sold for 5 L.
 
C

comm4300

Well-Known Member
#7
#7
aces27 said:
With zerodha ,

Assume I have Rs.5 L ,
How many lots of Nifty Options can I buy for Intra Day.
( For understanding - NIFTY CE - Near Month - 5000 - trading at Rs.100 premium)

For Buy :
1 Lot = 50 x 100 = Rs.5000
So For 5 L - 100 Lots.
Am I correct ?
Click to expand...
correct.

aces27 said:
And If I am to sell first ?
A rough estimate on how much can be sold for 5 L.
Click to expand...
Here, margin is to be considered. The best way to know this is to use What if analysis available in NOW/ZT ; shortcut key is Alt+W; key in the strike and premium with lots and you'll get margin details/lots that you can short.
 
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