Writing Options: Margins So to buy an option at 100 rupees, you only need 5000 rupees (100 x 50 rupees), but to write an option you will need around 25, 000 rupees that are marked for the market daily, which means that if there is a loss, you will be required to bring those funds to your trading account at the end of the day. Let's now perform the same exercise that we did in the previous chapter to understand the P%26L profile of the call option seller and, in the process, make the necessary generalizations. The concept of an intrinsic value of the option discussed in the previous chapter will also apply to this chapter. In addition, the breakdown point for a put option seller can be defined as a point at which the put option seller starts to make a loss after giving away all the premium they have collected.
Well, the decision to buy a call option or sell a put option really depends on how attractive the premiums are. Let's say the February option series continues and I want to write an option that expires in the March series. The SPAN shows the required margin, the premium required to buy options will be separated, so yes Total Margin+Premium to buy the options. For example, when you had invoiced 84000 rupees in options, it could mean, for example, buying and selling 20 lots of Nifty options trading at 40 rupees.
The most important point to note here is that the option seller is selling a call option because they believe that the price of Bajaj Auto will NOT increase in the near future. In such a case, the buyer of the Baja Auto 2050 American Call option can exercise his right, which means that the seller is obliged to reach an agreement with the option buyer. I wanted to know the amount of margin required for the “intra-day trade” for writing Nifty or Bank Nifty options. In the foreign exchange segment, launching a new contract that is INTEREST RATE FUTURES BONDS, there is no option to calculate the bond margin, so you can give an option in the cd segment to calculate the bond margin.
On the Options page, I can see the weekly expiration of the options (every Thursday), but the zerodhas calculator only provides monthly expiry margins. If you want to trade now with 2 lots of ingenious futures that require a margin of around 50,000 rupees, you can use 45,000 rupees of the collateral, but you will need to have 5000 rupees (10%) as cash in your trading account.