Option Stratergies Query
- Thread starter leena.hawal
- Start date
plz visit other threads in options section of this forum. There have been discussion on this. chk out the thread started by Sameer related to margin etc.
First check with your broker's /or their site.. cause each broker can decide their own rules about margin amount. NSE gives a guidence about how much margin amt should be but brokers do override that and use different rules..
So with your broker and then Ask your specific question here.
Happy Trading
First check with your broker's /or their site.. cause each broker can decide their own rules about margin amount. NSE gives a guidence about how much margin amt should be but brokers do override that and use different rules..
So with your broker and then Ask your specific question here.
Happy Trading
Re: Option Stratergies Margin Requirment Query
Thank u,
But actually Im doing Options Strategies studies & I have difficulty in that about related to Margin Requirement/ Exposures charging on Stratergies.Im explaining my Query as bellow:
EX -:
1] When i'm buying a call option of any stock i have to pay Premium which the price of the Option (if i bought Nifty future's {Nifty lost size is 50 Qty} 4400 call @ Rs.25 as premium i invest Rs.1250,i paid Rs.1250 for buying 4400 call.
And same will happen with Put.
2] In Uncovered Call,When i'm Selling a Call Option of 4400 Nifty future's i will receive the Premium from byer of that call option {@ Rs.75 * 50= 3750 as per premium received}BUT AS WELL AS PER NSE'S REGULATIONS APPROVED BY SEBI (as per my knowledge) I HAVE TO PAY MARGIN FOR STANDING THIS KIND OF SHORT POSITIO/CALL A WRITING (i think for risk purpse).
Means here, Margin Paid on writing Call Rs.27000
(minus) - Primium Received on writing Call Rs.3750
--------------------
Net Investment for Potion is Rs.23250
And same will happen with Put.
3 ] NOW As per in Covered Call when i Buying a stock in future i'm paying the span Margin/Exposur for Buying the particular stock {Buying Nifty Future @ Rs.4450 & its Margin paid Rs.27000 & when writing a 4600 Call option @ Rs.80{80*50 nifty lot size=4000}recived premium Rs.4000 on that potion.
BUT HERE I HAVE NOT TO PAY EXPOSURE ON CALL WRITING BUT ONLY PAY ON NIFTY FUTURES LOT BUYING.
Means here, Margin Paid on Nifty Furute Buying Rs.27000
(minus) - Primium Received on writing Call Rs.3750
--------------------
Net Investment for Potion is Rs.23250
NOW MY QUERY IS :-
Now what will happen/Margin Require to other Option Strategies too
like,
1) Long Combo -
Write Put
Buy Call
2) Protective Call -
Write Stock
Buy Call
3) Covered Put -
Sell Stock
Write Put
4) Short Straddel -
Write Call
Write Put
5) Short Strangle -
Write OTM Put
Write OTM Call
6) Collar -
Buy Stock
Buy Put
7)Bull Call Spread -
Buy Call (ITM)
Write Call (OTM)
8)Bull Put Spread -
Write Put
Buy Put
9)Bear Call Spread -
Write Call (ITM)
Buy Call (OTM)
10)Bear Put Spread -
Buy Put (ITM)
Write Put (OTM)
11)Long Call Butterfly -
Write 2 (ATM) Calls
Buy 1 (ITM) Call
Buy 1(OTM) Call
12) Short Call Butterfly
Buy (ATM) 2 Calls
Write (ITM) 1 Call
Write (OTM) 1 Call
13) Long Call Condore -
Buy (ITM Lower) 1 Call
Write (ITM Middel Lower ) 1 Call
Write (OTM Higher Middel)1 Call
Buy (OTM Higher) Call
14)Short Call Condore -
Sell (ITM Lower)Call
Buy (ITM Middel) Call
Buy (OTM) Higher Middel) Call
Write (Higher Srike) Call
I Hope You Would Understand My Query Sir.
Thank u,
But actually Im doing Options Strategies studies & I have difficulty in that about related to Margin Requirement/ Exposures charging on Stratergies.Im explaining my Query as bellow:
EX -:
1] When i'm buying a call option of any stock i have to pay Premium which the price of the Option (if i bought Nifty future's {Nifty lost size is 50 Qty} 4400 call @ Rs.25 as premium i invest Rs.1250,i paid Rs.1250 for buying 4400 call.
And same will happen with Put.
2] In Uncovered Call,When i'm Selling a Call Option of 4400 Nifty future's i will receive the Premium from byer of that call option {@ Rs.75 * 50= 3750 as per premium received}BUT AS WELL AS PER NSE'S REGULATIONS APPROVED BY SEBI (as per my knowledge) I HAVE TO PAY MARGIN FOR STANDING THIS KIND OF SHORT POSITIO/CALL A WRITING (i think for risk purpse).
Means here, Margin Paid on writing Call Rs.27000
(minus) - Primium Received on writing Call Rs.3750
--------------------
Net Investment for Potion is Rs.23250
And same will happen with Put.
3 ] NOW As per in Covered Call when i Buying a stock in future i'm paying the span Margin/Exposur for Buying the particular stock {Buying Nifty Future @ Rs.4450 & its Margin paid Rs.27000 & when writing a 4600 Call option @ Rs.80{80*50 nifty lot size=4000}recived premium Rs.4000 on that potion.
BUT HERE I HAVE NOT TO PAY EXPOSURE ON CALL WRITING BUT ONLY PAY ON NIFTY FUTURES LOT BUYING.
Means here, Margin Paid on Nifty Furute Buying Rs.27000
(minus) - Primium Received on writing Call Rs.3750
--------------------
Net Investment for Potion is Rs.23250
NOW MY QUERY IS :-
Now what will happen/Margin Require to other Option Strategies too
like,
1) Long Combo -
Write Put
Buy Call
2) Protective Call -
Write Stock
Buy Call
3) Covered Put -
Sell Stock
Write Put
4) Short Straddel -
Write Call
Write Put
5) Short Strangle -
Write OTM Put
Write OTM Call
6) Collar -
Buy Stock
Buy Put
7)Bull Call Spread -
Buy Call (ITM)
Write Call (OTM)
8)Bull Put Spread -
Write Put
Buy Put
9)Bear Call Spread -
Write Call (ITM)
Buy Call (OTM)
10)Bear Put Spread -
Buy Put (ITM)
Write Put (OTM)
11)Long Call Butterfly -
Write 2 (ATM) Calls
Buy 1 (ITM) Call
Buy 1(OTM) Call
12) Short Call Butterfly
Buy (ATM) 2 Calls
Write (ITM) 1 Call
Write (OTM) 1 Call
13) Long Call Condore -
Buy (ITM Lower) 1 Call
Write (ITM Middel Lower ) 1 Call
Write (OTM Higher Middel)1 Call
Buy (OTM Higher) Call
14)Short Call Condore -
Sell (ITM Lower)Call
Buy (ITM Middel) Call
Buy (OTM) Higher Middel) Call
Write (Higher Srike) Call
I Hope You Would Understand My Query Sir.
Last edited:
Thank you very much for your very kind advice."agar khud ko bhi jawab ata nahi hai toh dusron ko na kam dikhana jaruri nahi ."& one more thing maine specifically tumhe nahi puchha tha dubara mere kisi bhi thread par tumhe koi bhi comment dena compulsory nahi hai na tha .sawal begineers ko hi ate hai experts ko nahi "And Behave Yourself tOo"now Need not too reply too
Re: Option Stratergies Margin Requirment Query
HI Leena,
When you write an option , you have to pay the margin also , which will be refunded to you when you square up the option / on expiry. The premium you get to keep straight away. if you square up then ( which means you are buying back ) then you have to pay the prevailing premium at that time for the said option. Hence you profit = (sell price - buy back price) * 50 per lot . And the moment you square up your margin is freed. My broker charges same for nifty futures and option writing. Check with yours what he charges.
This applies for each and every option you write in whatever spread / straddle/ strangle ..et al.... be it in Nifty or stock future .
Hope its clear now .
regards
HI Leena,
When you write an option , you have to pay the margin also , which will be refunded to you when you square up the option / on expiry. The premium you get to keep straight away. if you square up then ( which means you are buying back ) then you have to pay the prevailing premium at that time for the said option. Hence you profit = (sell price - buy back price) * 50 per lot . And the moment you square up your margin is freed. My broker charges same for nifty futures and option writing. Check with yours what he charges.
This applies for each and every option you write in whatever spread / straddle/ strangle ..et al.... be it in Nifty or stock future .
Hope its clear now .
regards
Leena, Margin requirement is reality of trading in leveraged instruments. So, whenever you take an obligation (and hence yr broker takes that obligation on yr behalf), you need to put in security deposit
which is nothing but Margin.
So if you are executing any other option strategy which results in obligation (i..e Selling options), you will have to put Margin.
If you just buy option, then u don't have to put margin money.. Just pay the price of purchase and thats it.
Happy Trading
btw - emotional control and patience is one of the core characteristic of successful trader, so plz do keep tab on that for your trading success. Market puts us under emotional roller-coaster with every tick on the chart so we got to be on top of our emotions.
which is nothing but Margin.
So if you are executing any other option strategy which results in obligation (i..e Selling options), you will have to put Margin.
If you just buy option, then u don't have to put margin money.. Just pay the price of purchase and thats it.
Happy Trading
btw - emotional control and patience is one of the core characteristic of successful trader, so plz do keep tab on that for your trading success. Market puts us under emotional roller-coaster with every tick on the chart so we got to be on top of our emotions.
Last edited:
Re: Option Stratergies Margin Requirment Query
I am having the same question. If u find an broker who is charging margin as per risk only (by considering all combinations) pls let me know. My email ID is [email protected]
thanks
I am having the same question. If u find an broker who is charging margin as per risk only (by considering all combinations) pls let me know. My email ID is [email protected]
thanks
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