Zerodha Part 2

[summasumma]

Yes you get margin benefits and you can check it out on span calculator.. If you need an example, post it here and will let you know...

Thanks Zerodha.

Please clarify the margin required for following position:

SBIN - spot: 2210
Now my view in this stock is bullish and so wanted to gain using following credit spread position:

Position:
--------
Short 2050 Put @ 4.50/-
Long 2000 Put @ 2.50/-

Idea is to keep the credit of 2/-(4.5-2.5) @ expiry as i expect that SBIN wont close below 2050.
Lot size: 125
So profit expected by keeping premium=250/- Rs.

How much margin required today to enter this position?

Please clarify.

 

[summasumma]

Hi Zerodha

Suppose I bought a CE Option as NRML. Now say market goes against me ....It becomes very much bearish ...and I started loosing money.....say I lost more than my paid premium

At this situation what will happen ?


I have thought about these possible outcomes ...but I'm not sure about the real outcome ...Can you please post your comment ?

• 
  Does your system auto square-off as soon as cross past paid premium ?

• 
  Does your system auto square-off as soon as I loose 80% of my paid premium ? ?

• 
  Does your system do nothing because its a CE BUY order. I can loose maximum my paid premium ...not more than that.

Also ..
Suppose If I square off my position when my losses are beyond my paid premium ...Do I have to pay back the loss ?

Buying Options is like buying stocks. The maximum value it can go down is '0' where u lose all money paid for this trade.

So correct answer is:
"Does your system do nothing because its a CE BUY order. I can loose maximum my paid premium ...not more than that...so system just sits idle."

So the statement "say I lost more than my paid premium..." in your query is not valid.

But if you write(short) CE option and market is terribly bullish.
Now the CE option will go higher, higher and so you lose is unlimited money. So to control this behavior there is margin requirement for writing option in same way as futures and all the MIS/NRML funda will come into picture.

 

[Zerodha]

Buying Options is like buying stocks. The maximum value it can go down is '0' where u lose all money paid for this trade.

So correct answer is:
"Does your system do nothing because its a CE BUY order. I can loose maximum my paid premium ...not more than that...so system just sits idle."

So the statement "say I lost more than my paid premium..." in your query is not valid.

But if you write(short) CE option and market is terribly bullish.
Now the CE option will go higher, higher and so you lose is unlimited money. So to control this behavior there is margin requirement for writing option in same way as futures and all the MIS/NRML funda will come into picture.

Yes, if you buy options in NRML, because you have already paid the entire money upfront no positions get squared off if you loose 99% also..

 

[Zerodha]

Thanks Zerodha.

Please clarify the margin required for following position:

SBIN - spot: 2210
Now my view in this stock is bullish and so wanted to gain using following credit spread position:

Position:
--------
Short 2050 Put @ 4.50/-
Long 2000 Put @ 2.50/-

Idea is to keep the credit of 2/-(4.5-2.5) @ expiry as i expect that SBIN wont close below 2050.
Lot size: 125
So profit expected by keeping premium=250/- Rs.

How much margin required today to enter this position?

Please clarify.

Though the position seems to be hedged, but exchange doesn't really give you too much of a benefit..

For shorting the puts the margin required is around 36500

But if you are shorting 2050 and buying 2000 puts, the margin drops to around 34k..

If you are on Zerodha Trader you can check this yourself by going to tools , nest auto plugins and Span calculator..

 

[summasumma]

Though the position seems to be hedged, but exchange doesn't really give you too much of a benefit..

For shorting the puts the margin required is around 36500

But if you are shorting 2050 and buying 2000 puts, the margin drops to around 34k..

If you are on Zerodha Trader you can check this yourself by going to tools , nest auto plugins and Span calculator..

Thanks....around 36k margin for 250/-rs is not worth it as our exchange dont recognize...

Waiting for that dream day when our exchanges recognize all the option strategies and support them in margin benefits & order-execution...
I think its very verrrrrrrry far....

 

[GSSodhi]

Hi Zerodha, I am new in trading in options kindly tell me

suppose today i bought 1 lot nifty Call @rs.19 strike price 5800
How much money i required for intraday and take position.

 

[Sunny1]

Hi Zerodha, I am new in trading in options kindly tell me

suppose today i bought 1 lot nifty Call @rs.19 strike price 5800
How much money i required for intraday and take position.

seems you are very much new ....better study more about market before putting any trade ...

1 lot nifty call size is 50...

at 19 rs... you pay 50x19 = 950 Rs...total amount

 

[abhi.]

Hi Zerodha, I am new in trading in options kindly tell me

suppose today i bought 1 lot nifty Call @rs.19 strike price 5800
How much money i required for intraday and take position.

1Lot Nifty = 50 units
19*50 = 850
This is the amt u pay for option.

 

[comm4300]

There were 2 days in the last 10 when we had an issue with email server, but otherwise there should be no issue. If this is pertaining do let me know..

Contract note not received yet. 22:07 hrs now.

 

[mkbsiva]

Contract note not received yet. 22:07 hrs now.

you can check it in your backoffice if u need.. it will be updated before u get it in mail

its under "NSE Futures and Options"